May you live in interesting times
One of our stories in this telegraph covers an agreement recently reached in the European Union that reflects our recent success in advocating for proportional treatment for credit unions in the Digital Operational Resilience Act (DORA). DORA legislation is part of a larger Digital Finance Strategy that includes a Regulation on Markets in Crypto Assets (MiCA) and a proposal on distributed ledger technology (DLT).
Around the world, we are seeing legislation in this area move astonishingly quick. Many jurisdictions are motivated by protecting consumers, but also trying to keep pace with a quickly evolving industry. They also do not want to be left behind on the potential benefits of the new technology. Places such as Switzerland and Singapore are leading the way and are seen as standard bearers for providing clear and evolved frameworks that can allow crypto businesses to evolve and flourish. The Digital Finance Strategy in the EU shows their progress. The United States recently issued an executive order directing government agencies to form committees, research cryptocurrencies and work toward creating a regulatory framework for the crypto-asset market. The United Kingdom’s Financial Conduct Authority (FCA) is working hard as well, promising to put more resources into crypto. There are many other examples—and this doesn’t even mention the work being done by the international standard setters.
What is fascinating is that the legislative process is often inefficient by design. It is designed to build consensus among diverse parties and stakeholders. Complex parliamentary rules, committee meetings, institutional norms—all often allow the vetting of proposals before elected officials are required to vote on final passage and can often make the process brutally slow. There is an age-old adage that there are 1,000 more ways to kill a bill than there is to pass a bill.
So, what is interesting is that this normally slow legislative process is routinely being set aside where cryptocurrency regulation is concerned for the promise that all this technological innovation can bring. Perhaps there is an even more basic motivation in the prospect of getting rich quickly from this new, innovative technology. The good news is that in our first major advocacy victory with DORA, credit unions were considered, and the process accommodated our inclusion. These are certainly interesting times to be working in the financial services industry.
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