The White House issues a crypto executive order, the FCA finds gaps in brokers’ controls, and X announces a digital payments service

The White House has issued an executive order (EO) on “strengthening American leadership in digital financial technology.” The EO establishes a working group to create a new regulatory framework for digital assets, with the explicit purpose of supporting the sector’s growth. It also prohibits the development of a US central bank digital currency. Firms should monitor for updates, with initial recommendations on maintaining or repealing current rules expected within two months and a broader regulatory framework within six months.?

The FCA has reviewed wholesale brokers’ AML defenses. While recognizing the sector’s progress since its last thematic review in 2019, the regulator has identified areas of weakness, including:?

• Underestimating firms’ risk exposure.?
• Relying on other parties in transaction chains to conduct due diligence.?
• Limited data-sharing across the sector.?
• Poor awareness of the glossary code used in SARs relating to money laundering through the markets.?

Firms should read the full report for examples of good and bad practice and details of the FCA’s future areas of focus.

Social media company X will partner with Visa on a new digital payments tool. X Money will allow users to add funds to digital wallets via Visa Direct and make peer-to-peer payments with debit cards. Elon Musk, who owns X, has long expressed a desire to develop a payments service as part of making X an “everything app." According to X CEO Linda Yaccarino, the news is the “ first of many big announcements about X Money this year.”?

Until next week,

Andrew Davies, Global Head of Regulatory Affairs.

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