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FinTech Insights
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Welcome to Shearman & Sterling’s FinTech Insights, where we provide you with real time insight and key trends on the technological revolution that is transforming the financial services industry. Here you can find relevant information on the latest surrounding the regulatory framework, digital banking, blockchain, distributed ledger, cryptocurrencies, ICO’s and much more.

  • Where Is the Digital Asset Market Headed?
    Partner Donna Parisi (New York - Derivatives & Structured Products) recently sat down with Rebank podcast host Will Beeson to discuss the future of the digital asset space.
    The conversation touches on a myriad of interesting topics including regulatory frameworks for digital assets, institutional infrastructures that are creating challenges for the market and what the future holds when the power of blockchain and cryptocurrency is fully harnessed alongside other emerging technologies like artificial intelligence (spoiler: digital identities for the untapped market).
    Click to listen to the full podcast or from your preferred streaming service below.

  • ESMA Publishes Report on the Licensing of FinTech Business Model
    Fulfilling its mandate under the European Commission's FinTech Action Plan to map the current authorization and licensing approaches for innovative FinTech business models in Europe, the European Securities and Markets Authority (ESMA) has published a report on the licensing of FinTech business models. The report sets out the key conclusions identified from the information collected from national regulators through two surveys that ESMA conducted in the last two years, and some of the actions that have been taken to address the emerging challenges. The report does not make any recommendations, but instead refers to previous advice and reports that make recommendations for an EU-level response to the issues.

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  • CFTC Chairman Maps Agency’s Approach to FinTech Regulation
    While speaking before the D.C. Blockchain Summit, Commodity Futures Trading Commission (CFTC) Chairman J. Christopher Giancarlo last week discussed the relationship between technology, regulation and markets, and described the steps the CFTC has taken to stay in step with innovations that have posed regulatory challenges. 

    Chairman Giancarlo touted the potential for such technological innovations, including blockchain and digital ledger technology (DLT), to transform the way that regulators gather information and lower operational costs for financial institutions.  Interestingly, Chairman Giancarlo argued that blockchain and DLT could have helped regulators gather real-time trading data during the 2008 financial crisis, which he believes at a minimum could have prompted “better-informed” and “more calibrated regulatory intervention.”

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    CONTRIBUTOR: Andy Baxter
    CATEGORIES: BlockchainCFTCDLTUS Federal Regulation
  • LabCFTC Publishes Smart Contract Primer
    LabCFTC, the Commodity Futures Trading Commission’s (CFTC’s) FinTech initiative, earlier this week published a primer on smart contracts.  The primer defines smart contracts and explains some of their key attributes, discusses the CFTC’s role in regulating smart contracts, outlines some potential benefits and use cases and warns market participants of potential associated risks.

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    CONTRIBUTOR: Andy Baxter
    CATEGORIES: CFTCDLTSmart ContractsUS Federal Regulation
  • Three Central Banks Explore Advantages Of Wholesale Central Bank Digital Currencies
    On November 15, 2018, the Bank of England, the Bank of Canada and the Monetary Authority of Singapore published a joint report entitled, "Cross-Border Interbank Payments and Settlements." Referring to current industry projects to address existing problems in cross-border payments affecting end-users, commercial banks and central banks, the report analyzes these issues and discusses proposed new models for processing cross-border transactions. The report sets out three models for cross-border payments and settlements and discusses the key considerations and dependencies of each model. Each model is then assessed against the existing identified challenges in cross-border payments.

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  • UK Crypto-Assets Task Force Outlines the Path to Crypto-Asset Regulation
    The U.K. Crypto-Assets Task Force has published its Final Report. Established in March 2018 by the U.K. Chancellor of the Exchequer as part of the U.K. government's FinTech Sector Strategy, the Task Force comprises representatives from HM Treasury, the U.K. Financial Conduct Authority (FCA) and the Bank of England.

    The Task Force engaged with over 60 firms and other stakeholders to seek their views on topics including: the trajectory of the industry, the risks, benefits and underlying economic value of crypto-assets and the U.K.’s future regulatory approach. Stakeholders were of the view that there is a lack of regulatory clarity in the U.K. and that regulation should be introduced to support the legitimate players in the crypto-assets market. It is also crucial in mitigating risks. There were also calls for regulatory and tax frameworks to be aligned.

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  • Government of Gibraltar Publishes Outline of Forthcoming Token Regulatory Framework 
    On March 14, 2018, the Government of Gibraltar published a white paper outlining forthcoming proposals to regulate token sales, secondary token market platforms and token investment services.

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    CATEGORIES: BlockchainDLTICOsInternational FinTechEUUK
  • Securities on Blockchain
    Winter 2017/2018
    Reade Ryan contributed to an article, titled “Securities on Blockchain,” published in the Winter 2017-2018 edition of The Business Lawyer, which analyzes how blockchain securities fit within current laws covering uncertificated securities, and also provides guidance to corporate lawyers faced with providing a legal opinion related to the issuance of securities on a blockchain.

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    CATEGORIES: BlockchainDLT