IRS and CFPB DeFi Rules Repealed

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📰 Welcome to the Newsletter

Good morning from Global Custody Pro. Each week, we break down the most important developments in global custody, clearing, payments, and digital assets - so you don’t have to. Let’s dive into this week’s top stories.

Table of Contents

• 🌏 Global Custody News

• 🚀 Digital Asset News

• 📊 Chart Of The Week

• 📣 Quote of the Week

• 🎧 What We’re Listening To

• 📺 What We’re Watching

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🌏 Global Custody News

• ISDA has welcomed the Bank of England's proposed Fundamental Rules for financial market infrastructures but urged greater emphasis on transparency, particularly for central counterparties (CCPs). In its response, ISDA called for explicit inclusion of transparency principles within the proposed regulations to enhance market participants' understanding of CCP risk management practices and operational resilience measures. The industry group highlighted the need for improved communication on systemic risk assessments from CCPs to market stakeholders and recommended frequent, industry-wide resilience testing to strengthen overall financial stability and preparedness against operational disruptions and cyber threats.

• SIX x-clear, a unit of Swiss financial infrastructure giant SIX, will roll out preferred clearing services for Euronext market participants starting in March 2025, covering trades in Paris, Amsterdam, Brussels, Lisbon, Dublin, and Milan, with Euronext Italy set to join by Q2 2025. The move aims to boost interoperability, competition, and market efficiency while cutting counterparty risk, leveraging SIX’s advanced clearing technology and risk management systems to create a seamless and secure trading environment across Europe. Laura Bayley, Head of Clearing Services at SIX, underscored the expansion’s role in enhancing transparency, sustainability, and resilience in the financial sector by offering an additional central counterparty (CCP) option.

• Brown Brothers Harriman (BBH) has partnered with MUFG Investor Services, a unit of Mitsubishi UFJ Trust and Banking, to offer enhanced global securities lending services to BBH's asset manager and financial institution clients, the companies announced on March 5, 2025. Under the agreement, MUFG Investor Services will deliver sophisticated lending capabilities including expanded market access, collateral flexibility, and industry-leading indemnification supported by Mitsubishi UFJ Financial Group, Japan's largest banking group. BBH will oversee integration and coordination, reinforcing its position as a custodian focused on high-touch client service. Both companies highlighted their similar philosophies of providing specialized, premium service to institutional investors.

• Citco, a leading asset-servicer in the alternative investment sector, has doubled its assets under administration in the Middle East to $250 billion since opening its Abu Dhabi Global Market office in 2021, driven by regional outsourcing trends, an influx of new funds, and business-friendly regulations. The company, which services over $2 trillion globally, attributes this growth to its expertise and technology, supporting a diverse client base with services including treasury, loan handling, and daily NAV calculations amid the region's rising prominence in the global financial landscape.

• HKEX and CMU OmniClear, which operates the Central Moneymarkets Unit for the Hong Kong Monetary Authority, have signed a Memorandum of Understanding to enhance the city's post-trade securities infrastructure for fixed-income and currencies. The collaboration will focus on improving cross-asset efficiencies, expanding the use of mainland Chinese bonds as collateral, strengthening Hong Kong's position as a bond issuance centre, and developing an international central securities depository in Asia. HKEX CEO Bonnie Y Chan said the partnership aims to build a world-leading fixed-income ecosystem and support RMB internationalisation, while HKMA Chief Executive Eddie Yue noted it marks progress toward establishing an international securities depository in the region. The initiative leverages the success of Bond Connect and Swap Connect, which have boosted international access to China's $25 trillion bond market.

• The FDIC announced on March 3, 2025, the withdrawal of proposed rules related to brokered deposits, corporate governance for institutions with over $10 billion in assets, and amendments to filing requirements under the Change in Bank Control Act (CBCA). Additionally, the FDIC has withdrawn its previously approved authority to propose new rules governing incentive-based compensation arrangements under Section 956 of the Dodd-Frank Act, as the proposal was not fully supported by all required regulatory agencies. The FDIC stated it no longer intends to finalize these proposals but may revisit them with new proposals in the future.

🚀 Digital Asset News

• The US Senate on Tuesday voted to repeal two key crypto regulations (per Axios) from the Biden era, one from the IRS that broadened reporting requirements for decentralized finance operations and one from the CFPB that expanded oversight to fintech apps including noncustodial crypto wallets. Introduced by Sen. Ted Cruz and Sen. Pete Ricketts and backed by the Trump administration, the measures were approved under the Congressional Review Act by a 70 to 27 vote and a procedural motion, respectively. Senate Majority Leader John Thune said the rollbacks were aimed at restoring financial innovation and preventing digital asset companies from relocating overseas, while critics argued that the IRS rule is technologically unfeasible and that noncustodial wallets pose significant compliance challenges.

• Crédit Agricole CIB, CACEIS, and the European Central Bank have successfully tested a decentralized blockchain protocol for interbank payments using wholesale Central Bank Digital Currency (wCBDC), demonstrating the potential for secure, real-time transactions without a central platform. The experiment, part of the Eurosystem's research on digital money, utilized the open-source so|cash protocol and Banque de France’s DL3S system, showcasing seamless interoperability, automated liquidity management, and 24/7 settlement capabilities, with support from White & Case and KPMG France. This initiative relied on the support of several interbank partners acting as observers, including BNP Paribas, Santander, SEB, and Societe Generale.

• The U.S. Securities and Exchange Commission’s Crypto Task Force will launch a series of roundtables on crypto asset regulation, kicking off with a public session on March 21, 2025, titled “How We Got Here and How We Get Out – Defining Security Status,” the agency announced on March 3. Held at SEC headquarters in Washington, D.C., and streamed live on SEC.gov, the event aims to clarify regulatory boundaries and foster public engagement, led by Commissioner Hester M. Peirce, who emphasized leveraging public expertise for a practical framework. Established in January by Acting Chairman Mark T. Uyeda, the task force seeks to define clear guidelines, streamline registration, and enhance disclosure, with opportunities for public input and meetings available via the Crypto Task Force webpage.

📊 Chart Of The Week

📣 Quote of the Week

🎧 What We’re Listening To

📺 What We’re Watching

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