This is a significant no-action letter. It signals that the SEC is trying to get comfortable with the most important impediment to the use of blockchain in the financial markets: custody. By this letter, the SEC is testing whether Paxos can demonstrate that it can maintain good, auditable records of the positions that it maintains for each of the participants. If this can be done, there is the possibility for widespread use of blockchain in the securities markets and beyond. If Paxos shows…

Both regulators and industry participants underestimated the difficulty of adopting these rule amendments, both from an operational standpoint and from the standpoint of disrupting ordinary course business expectations and arrangements. The difficulties of coming into compliance with the rule also had the likely side effect of driving a good number of smaller or medium-sized firms out of the TBA business.

A mistake in the original implementation plan was that the TBA margin rules were…

Former CFTC Chair Gary Gensler was expansive in his inclination to assert the agency's authority, even outside the United States. See, e.g., . The former Chair's overreach was defeated by non-U.S. regulators, who were not willing to defer to him. See, e.g., . While the ultimate disposition serves both U.S. interests and global markets better than the prior expansionist view of U.S. regulatory dominion, it neither created a…

Facebook's attempted entry into the digital currency market accelerated the inevitable: Congress and the financial regulators are more closely scrutinizing the entry of technology firms into the financial markets. What was not inevitable was Congressional overreaction. While it now seems universal practice to refer to Libra as a Stablecoin, it is not: it is an asset-backed coin (try ""). Because the managers of Libra would have had the ability to shift the assets supporting Libra, Libra is…