Biden’s Executive Order Ushers in a New Era of Digital Asset Finance
Yesterday, US President Joe Biden issued a landmark executive order on digital assets , opening the door for comprehensive federal legislation, and paving the way for the United States to take a more active role in driving innovation and regulation in the industry.
OSL welcomes the Biden order as part of the inevitable global regulation of the digital asset ecosystem and the beginning of a new era in digital asset finance. OSL was built with regulatory compliance woven into its DNA, and operating a global, regulated business is the cornerstone of our growth strategy.
OSL is the first and only digital asset firm licensed by the SFC in Hong Kong. In Singapore, OSL operates under the Payment Services Act with an exemption from the MAS (license pending), whilst our Americas-facing business is FinCEN registered. In addition, our Zodia Markets joint venture with Standard Chartered will be offering services to corporations, institutions and professional investors in the UK and Europe, subject to regulatory approval. OSL also plans to pursue licensing in other major jurisdictions.
With the regulatory clarity provided by the executive order , the US government has now established a clear roadmap for American regulators and operators to continue to build the domestic digital asset ecosystem. At the same time, the order allows space for market participants to innovate and compete on a level playing field. This will, in turn, further validate and buoy existing comprehensive regulatory frameworks in forward-thinking markets such as Hong Kong and Singapore, and encourage regulation-hesitant countries to move from the side-lines and act.
The order also mentions AML/CFT, consumer protection, and climate change as key issues related to digital assets that need to be addressed. We agree wholeheartedly, and expect the US regulations will also evolve to address client asset segregation, which will offer the safety and assurance needed to attract wealth managers to the market.
OSL is a first mover in digital asset safety and security. We provide best-in-class KYC, AML, and market surveillance standards and practices across our global businesses. The consumer protections offered through our SFC-regulated unit, OSL Digital Securities, are equivalent to those provided to traditional institutional investors under existing financial regulations in Hong Kong. Under our Hong Kong license, OSL is one the few operators in the world with regulated client asset segregation, a normal practice in traditional markets and the future trend for regulated operators globally. Furthermore, through our parent company, BC Technology Group, we are focused on ESG, and have committed to a comprehensive sustainability program as part of our business plan.
With respect to the United States in particular, it is an important market for OSL and we’ve been investing strongly to foster further growth and success in the region. In December, we hired Merrill Lynch and RBS veteran Jeff Howard as our Head of North America Business Development and Institutional Sales, and expanded access to our institutional-grade OSL Exchange to investors in North America.
In July last year, we launched our market-leading prime brokerage business in the Americas, providing customers with best in class electronic and OTC execution, and a variety of more sophisticated prime products in accordance with local regulations.
We strongly believe that regulated entities are the future of digital assets and capital markets in the digital age. We’ve maintained this position since our inception and are delighted to see our approach further validated by Biden’s executive order.
In this new era of regulated digital asset finance, the roadmap is clearer than ever. The future is bright for OSL – and the digital asset industry as a whole.