Sullivan Led the Chamber of Digital Commerce’s Response to FSB’s Consultative Report on Global Stablecoin Arrangements
New York, NY – Sullivan’s Fintech and Blockchain Chair Joel Telpner led the working group effort in coordinating and preparing a response letter on behalf of the Chamber of Digital Commerce (“Chamber”) to a consultative report issued by the Financial Stability Board Consultation (“FSB”) on Global Stablecoins, “Addressing the Regulatory, Supervisory, and Oversight Challenges Raised by Global Stablecoin Arrangements.”
The FSB’s mandate to seek public consultation comes from a call by the G20 to examine regulatory issues raised by “global stablecoin” arrangements and to advise on multilateral responses as appropriate, taking into account the perspective of emerging market and developing economies.
The Chamber is the world’s largest blockchain trade association. Its mission is to promote the acceptance and use of digital assets and blockchain technology with the support of a diverse global membership representing the blockchain industry. Sullivan was pleased to team up with the Chamber to advice the FSB on appropriate regulatory approach with regard to stablecoins.
The Chamber’s response letter highlights key points for consideration by the FSB. First, the term “stablecoin” should be accurately defined for regulatory purposes. Unfortunately, the term is presently broadly misunderstood and misused to describe all different kinds of security or commodity tokens. Also, rather than distinguish stablecoin arrangements on whether or not they are “global,” it is critical to consider the systemic importance of a stablecoin arrangement to determine the level of regulatory oversight needed. Digital assets are seldom confined by jurisdictional boundaries.
Thereafter, the FSB should acknowledge that some stablecoins are already subject to existing regulation under the same activity, same risk, same regulation principle. New or additional regulation is warranted only to the extent some stablecoins present unique unaddressed risks.
Lastly, the Chamber’s response letter notes that any new regulation should be imposed only after a careful cost-benefit analysis. In all cases, it is paramount to have comparable regulations globally and all regulators are encouraged to work on a cross-border basis to harmonize any regulatory treatment of stablecoins and other digital assets.
View the Chamber’s full response letter here.
About Sullivan’s Fintech and Blockchain Practice
Sullivan has earned its thought-leader and trailblazer reputation in the industry by providing legal representation to more than 100 fintech and blockchain clients whose size vary from governments, top cryptocurrencies, investment vehicles and large enterprises to smaller startups. We help our clients pursue and execute first-of-their-kind business ideas. These new ideas involve unseen regulatory uncertainty and have forced us to think beyond traditional ways of practicing law.
We help clients navigate emerging legal issues and regulatory uncertainties, manage risk, identify opportunities and proactively plan for the future. With deep financial, regulatory and technological expertise, we ascertain the implications new fintech solutions will have on our clients’ operations and prepare them to offer new services and products. Working with entrepreneurs, investors and established companies in a range of industries, we provide strategic guidance to help clients finance, develop and capitalize on the promises of technology while gaining a competitive edge in the marketplace.
Representative Client Work
- Advising the Republic of the Marshall Islands in issuing of digital sovereign currency.
- Helping to launch ndau, a buoyant stablecoin virtual currency;
- Advising Ohanae in creating a platform for issuing, trading, clearing, and settling equity issued in digitized form on a blockchain;
- Structuring for Gita Holdings/GreatX a structured, principal-protected tokenized investment product allowing investors to obtain upside exposure to hotel room blocks in various hotel properties;
- Assisting Fyooz in the development of its platform for tokenizing celebrities and athletes;
- Advising Celsius in its global crypto lending business; and
- Providing regulatory advice to prominent blockchain projects including Aeternity, Fantom, NEM, Streamr and Zilliqa.
Sullivan & Worcester (Sullivan) is a leading AmLaw 200 law firm. With over 200 attorneys in Boston, London, New York, Tel Aviv and Washington, DC, Sullivan guides organizations that are rewriting the rules. Sullivan’s clients, including Fortune 500 companies and emerging businesses, rely on Sullivan’s strategic vision, comfort with complexity and intense focus on results. As a global law firm, Sullivan’s reach extends beyond the United States. With international practices in the United Kingdom and Israel, Sullivan has represented clients around the world and has a deep bench for working on a variety of matters and issues affecting clients globally.
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