The payments landscape for community banks is changing rapidly as traditional payments converge with new instant payment systems and emerging cryptocurrencies. It is critical for Community Banks to maintain awareness of developments in the payments space to assess new opportunities, mitigate risks, and ensure that their payment strategy aligns with overall business plans.
June 13, 2022
ICBA concluded its new series of blog posts on the collapse of the TerraUSD stablecoin with a post focusing on its impact on community banks and the regulatory debate.
Direct Impact: The final post in the three-part series notes that the market instability is fueling the policymaker push for a regulatory structure to address crypto’s risks. Previous posts provide a community bank primer on the TerraUSD collapse and examine its impact on the financial markets.
Regulatory Updates: Meanwhile, the debate over crypto regulation continued after last week’s introduction of legislation by Sens. Kirsten Gillibrand (D-N.Y.) and Cynthia Lummis (R-Wyo.) to entrust most digital asset oversight authority to the Commodity Futures Trading Commission, rather than the Securities and Exchange Commission.
Sheila Bair Op-ed: In a new op-ed, former FDIC Chairman Sheila Bair said the SEC should take a stronger role in regulating stablecoins, by using its model for overseeing government money market mutual funds and spurring Congress to establish a regulatory framework.
Treasury Remarks: Separately, Deputy Treasury Secretary Wally Adeyemo said his department is focusing its crypto efforts on:
Ensuring the sector’s compliance with the Travel Rule, which requires the collection and transmission of information about who is sending and receiving funds.
Ensuring unhosted wallets—in which users hold a cryptocurrency balance outside of a third-party exchange—do not facilitate illicit payments.
More: Additional information on cryptocurrencies and central bank digital currency is available on the ICBA website.