From Fortune · Andrew M. Cuomo · · 2m
Cuomo: Congress must catch up to Wall Street on blockchain
Former New York governor Andrew Cuomo argues that blockchain technology for securities trading is inevitable, and Congress needs to pass regulatory clarity before America falls behind.
In brief
Former New York governor Andrew Cuomo argues that blockchain technology for securities trading is inevitable, and Congress needs to pass regulatory clarity before America falls behind. Andrew Cuomo says blockchain technology for trading securities is advancing despite regulatory uncertainty, and Congress must pass the…
Technology disrupts finance, then wins
Electronic trading challenged Wall Street in the nineteen sixties and seventies, facing hostility and skepticism. After the nineteen eighty-seven market crash, regulators made electronic execution mandatory. Today electronic trading is simply trading.
Blockchain is the next frontier
Blockchain technology now presents the same moment, offering a new foundation for issuing securities, recording ownership and trading. Like electronic trading before it, blockchain is challenging the status quo and prompting vocal critics.
How blockchain works in finance
Blockchain uses cryptography to create verifiable, tamper-resistant records of transactions. Early applications became known through cryptocurrencies, but the underlying technology has applications far beyond cryptocurrency, including issuance and transfer of traditional financial assets.
Cuomo's early interest in blockchain
In two thousand eleven, as governor of New York, Andrew Cuomo's technology advisers and financial professionals introduced him to cryptography and blockchain. New York was the first state to license these companies.
Blockchain offers twenty-four-seven trading
Blockchain presents potential for faster settlement, more direct connection between issuers and investors, greater transparency and the possibility of a twenty-four-seven global marketplace that could attract additional investment to American securities markets.
“The days of nine-to-five hours and "closed for the weekend" signs are long gone for almost every economic enterprise, except Wall Street!”
SEC exemption and OKXICE venture
The SEC recently established an innovation exemption to facilitate trading of certain U.S.stocks using blockchain technology.
Global adoption is already happening
Europe and other jurisdictions have already established frameworks to authorize blockchain use in financial markets.Much of the financial establishment is changing its position, with initial opposition giving way to competition to adopt the new technology.
Congress must act on CLARITY Act
Congress's failure to advance the CLARITY Act in September was a lost opportunity to establish a durable regulatory framework for digital assets.
The key point
Andrew Cuomo says blockchain technology for trading securities is advancing despite regulatory uncertainty, and Congress must pass the CLARITY Act to establish a framework before competitors abroad lead.
