September 19, 2022

Today’s guest brings a unique perspective to regulatory modernization. Jessica Renier is Managing Director of Digital Finance at the Institute of International Finance, or IIF. She previously held senior positions at the Treasury Department, the White House and the Federal Reserve — plus she is a lieutenant in the U.S. Navy Reserve. Jess has a kaleidoscopic view of the financial and financial regulatory sphere, worldwide. She also has strong opinions. I’ve known her since her Treasury days but recently heard her speak to an off-the-record gathering, and I reached out to invite her to put some of those insights on the record for our audience.

Jess’ thinking is grounded in lessons she learned the hard way working at the Fed through the financial crisis, including that while financial services change, the basics of financial regulation — the risks that will always have to be managed — stay the same. She thinks the so-called crypto winter is a healthy market correction that is squeezing out irrational behavior and low-value innovation. She thinks regulators need to build much more cross-agency coordination. She thinks they need to open up safe space for industry experimentation. She worries that much of the regulatory response to experimentation thus far is, “pretty darn punitive.” She also worries about regulators falling behind the tech curve and, among other things, clinging too long to old tools.

Our discussion covers a lot of ground. We talk about economic trends, including inflation. We talk about cross-border payments. We talk about “de-globalization,” including the move toward localization of data.

And, of course, we talk about crypto, DeFi and CBDC. She has views on how CBDC policy is evolving in the U.S. and Europe. She describes her concerns about the downside risks that could arise from retail CBDC and the risk that proliferation of CBDCs could undermine interoperability of money. As she notes, when you’re dealing with sovereign currencies, you can’t afford to fail, much less to “fail fast.” And she assesses progress in regulation of stablecoins, whether they could coexist with CBDCs, and where they may fit into the changing money ecosystem, including strategies being explored in the U.S., Europe and Japan.

Last but not least, she has sage advice for regulators and policymakers.

More on Jessica

Jessica Renier is Managing Director of Digital Finance at the Institute of International Finance. She previously served in the Executive Office of the Presidentas Program Associate Director at the Office of Management and Budget, overseeing a range of federal government agencies, including the Departments of Housing and Urban Development, Treasury, and Commerce, and the Small Business Administration. She also previously served as Senior Counselor for Terrorist Financing and Financial Crimes at the U.S. Department of the Treasury, as well as Senior Advisor in the office of the Under Secretary for Domestic Finance, where she led the Department’s financial technology and innovation policy, with a subject matter focus in digital assets, smart contracts, and artificial intelligence.

Prior to joining Treasury, Jessica was a manager in Deloitte Consulting’s Strategy & Operations practice for the banking and securities industry, specializing in blockchain technology and digital identity. She previously worked at the Federal Reserve Banks of New York and Dallas, J.P. Morgan Securities, and the Hoover Institution. She holds an M.B.A. from Stanford’s Graduate School of Business, an M.A. in Defense and Strategic Studies from the Naval War College, and a B.A. in Economics, Communication, and Spanish from Trinity University. She is a term member of the Council on Foreign Relations and an Officer in the U.S. Navy Reserve.

More for our Listeners

I hope you enjoyed today’s show. Come to regulationinnovation.org for much more information, including links to many of the initiatives Jessica mentioned.

Meanwhile, we have great podcasts coming up. Up next is Sunayna Tuteja, the Chief Innovation Officer of the Federal Reserve System. We’ll have Deborah Young, founder and CEO of the RegTech Association. We’ll have Jai Ramaswami from Andreesen Horowitz. We’ll have Circle CEO Jeremy Allaire back again, along with Tomicah Tomilson of Haun Ventures. And we’re going to talk with the one and only Simon Taylor, on all things crypto and defi.

Earlier this month I spoke at Compliance.ai. And we’ll of course be at Money 20/20 in October, and the Singapore Fintech Festival in November – all back in person again!

Don’t forget to follow AIR on LinkedIn and Twitter. Be sure to leave us a five-star rating on your favorite podcast platform. And please follow me personally on Twitter @JoAnnBarefoot. UNTIL NEXT TIME, KEEP INNOVATING!

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