The drop in price of the stablecoin TerraUSD and the collapse of its associated cryptocurrency LUNA have sparked a global call for stablecoin regulation. From the US Treasury Secretary to the Securities and Exchange Commission (SEC) or the Bank for International Settlements (BIS), regulators around the world have expressed concerns about stablecoins and the need to enact regulations.
Big Tech companies had a quiet week as the UK announced new rules it plans to introduce in the coming months. One of the bills that could affect Big Tech probably won’t pass until next year.
Financial and banking regulators in Europe and the United States issued advisories on non-bank lenders and fair lending, and they continued their work on regulating bank mergers and artificial intelligence (AI).
Crypto and Stablecoins
The loss in value of TerraUSD has given some regulators good arguments that stablecoins are likely to panic. And a run is what happened earlier this week. U.S. Treasury Secretary Janet Yellen mentioned TerraUSD’s collapse Tuesday morning (May 10) during a hearing before the Senate Banking Committee as she discussed the report, using it to highlight the “risk for financial stability” that stablecoins represent.
Read more: Push to Regulate Stablecoins Gains Momentum as TerraUSD Spirals
Pablo Hernández de Cos, Chairman of the Basel Committee on Banking Supervision and Governor of the Bank of Spain, warned Thursday, May 12 that rapid developments in decentralized finance (DeFi) and crypto assets require proactive regulation and regulation. and future-oriented. prudential approach. Although some assets are considered “stable” and “currency,” they often fail on both counts, argued Hernández de Cos.
See more : BIS Committee Chairman Questions Benefits of Crypto, Calls for Regulation
Also on Thursday, SEC Commissioner Hester Peirce said there could be some movement around stablecoins to enact new regulations. And SEC Chairman Gary Gensler said his agency should look into stablecoin risks, growing concerns over financial stability and monetary policy.
Read more: SEC’s Peirce Anticipates Stablecoin Regulation in the Wake of Terra Tumble
Amid the stablecoin and crypto meltdown, Coinbase registered with the SEC “to gain better access to capital markets quickly and efficiently when needed,” and although the company has no no immediate plans to offer securities at this time, with this registration Coinbase will “be able to offer and sell securities in the future.” Registration could allow Coinbase to quickly offer any crypto asset on its platform that could be considered a security by the SEC or by a court.
See more : Coinbase registers with the SEC to avoid regulatory setbacks
The British government unveiled its legislative program for the next parliamentary session on Tuesday. The most important bill for Big Tech is the Online Safety Bill, which aims to limit harm online by dramatically increasing Big Tech’s responsibilities to monitor content posted on their platforms. Other bills, such as the Brexit Freedom Bill, the Media Bill or the Data Reform Bill, will also have an impact on Big Tech.
Read more: Queen’s Speech to Parliament highlights new rules for big tech
A bill to create a new tech watchdog with the power to sanction Big Tech companies if they breach competition and consumer rules will only be discussed as a “bill.” This means that while the government is still planning to introduce legislation to underpin the powers of the Digital Markets Unit (DMU), it will do so in due course, and it may not be during the parliamentary session which begins on Friday. (May 13). ).
See more : Google and Meta Dodge UK’s plan to force fairer deals with publishers
The Consumer Financial Protection Bureau (CFPB) issued an advisory on Monday (May 9) to affirm that banks and other lenders must follow fair lending laws when canceling loans or changing terms and not just during the application process. The rules apply before and after credit approval by the bank.
Read more: CFPB advice on fair lending rules could extend to AI
On the same day, the CFPB defended its payday lender rules in court. Industry trade associations have argued that the payday rules enacted in 2017 violate federal rule-making procedures and Supreme Court precedents and should therefore be struck down.
See more : Payday lenders face tough road to invalidate CFPB rules
Lending rules may also be subject to regulatory scrutiny in Europe. the The European Banking Authority (EBA) has warned that the largely unharmonised regulatory regimes across Europe regarding non-bank lending could create challenges for stakeholders, including regulators, and it has recommended changes that could affect lending solutions like buy now, pay later (BNPL) and peer-to-peer (P2P) platforms.
Read more: EBA warns against non-bank lenders and recommends regulatory changes
Speaking at an event on Monday, Acting Comptroller of the Currency Michael Hsu spoke about the need to rethink the assessment of bank mergers and asked his team to work with the Department of Justice (DOJ) and d ‘other banking regulators to review merger executives.
See more : OCC comptroller directs staff to review bank merger framework