AIR CEO Jo Ann Barefoot urged White House officials to study benefits of blockchains and other distributed-ledger technologies in areas such as anti-money-laundering (AML) and financial inclusion, while cautioning them to be vigilant about risks associated with digital assets.

Barefoot outlined AIR’s views in a March 3 letter to the White House Office of Science and Technology Policy, responding to a Request for Information (RFI) on the National Digital Assets Research and Development Agenda.

“We believe that there are ample opportunities for the U.S. government and nations around the globe to employ beneficial uses of blockchain and other distributed-ledger technologies (DLT) while being vigilant about dangers associated with digital assets,” Barefoot wrote in the letter. “Potential benefits include combating illicit financial crimes, expanding financial inclusion and monitoring efforts to mitigate climate change.”

The letter laid out key research topic areas in digital assets; the risks and opportunities of blockchain technology for regulators and law enforcement; and a case for a holistic approach to managing technologies underlying digital assets. It also detailed the potential impact of those technologies on financial stability, AML, financial inclusion and climate change.

“Digital currencies, blockchains and other distributed-ledger technologies are increasingly part of the mainstream economy despite turmoil in the crypto market and remaining skepticism about their applicability for the consumer,” Barefoot wrote. “Technology innovators, investors and an array of both startups and established companies are devoting a tremendous amount of resources to developing beneficial use cases for these technologies as well as solutions for addressing the related risks.”

Barefoot also stressed the importance of equipping regulators with the technological expertise and capability to manage the digital transformation of financial markets.

“A key focus of federal R&D efforts should be how to strengthen human-capital resources across the regulatory agencies to ensure that the government can manage rapid digital change,” she wrote.

Read AIR’s full comment letter here.

###

About AIR

AIR is a nonprofit, non-membership organization working to make the financial system fully inclusive, fair and resilient through responsible use of new technology. By connecting regulation, finance, technology and society, AIR drives global innovation and collaboration to address rapid technology change.

Connect with AIR


WHITE PAPER • Regtech Manifesto: Redesigning Financial Regulation for the Digital Age

In 2020, the Alliance for Innovative Regulation published this road map for a gradual but urgent conversion of the financial regulatory framework to a digitally native design. One former U.S. agency head called it “the bible for every regulator.”

OP-ED • Bank Regulators Need to Overhaul Their Digital Capacity

There has never been a better time for agencies regulating the financial sector to prioritize their own digital makeover, argues AIR CEO Jo Ann Barefoot in an op-ed published by American Banker.

WHITE PAPER • Solving the Regulators’ Dilemma

AIR partnered with the Buckley law firm on a white paper laying out key innovation hurdles for financial regulators. Among the challenges is that as innovation speeds up, regulatory agencies are often slowed down by laws and other limiting protocols that merit a fresh look.

Get involved

Stay informed by joining our mailing list