Reported valuations of cryptocurrencies and digital assets are on the rise. Interest from professional and retail market participants alike are pushing cryptocurrency out of the fringes of financial markets and very much towards the centre. Moreover, the range of new providers coming to market via initial coin offerings (ICOs) or from those established firms and new entrants structuring financial instruments, funds and/or benchmarks referencing the underlying valuations of cryptocurrencies, have endorsed this emerging asset class even further. 2018 is unlikely to be any different in terms of growth of investments in cryptocurrencies and digital assets reliant on distributed ledger technology and transactions (DLT).
Initial Coin Offerings (ICOs) come in different sizes and forms. They also offer different risk exposures to different business models across different jurisdictions and their legal systems. Interest in ICOs, cryptocurrencies and digital assets, notably from retail clients and non-professional market participants, are increasingly causing EU and national as well as supervisory authorities including ESMA to issue warnings on their risks and those financial products that reference cryptocurrency and other digital assets.
At the 2017 Fintech Americas held on 5-6 October in Miami, Florida, Samuel Kramer, partner based in Chicago, had a fireside chat with Kevin Greenfield, Director for Bank Information Technology, Office of the Comptroller of the Currency, about the regulatory framework in the region. They also discussed the challenges that both regulators and banks face when pursuing or promoting an innovation and bank transformation agenda. It also provided the point of view of the key and instrumental role that regulators play in supporting the digital transformation in the Americas.