Deposits & Deposit Insurance

Bank customers won’t switch to stablecoins. They’ll switch to software that uses stablecoins. That’s one reason stablecoins’ impact on bank deposits is so hard to predict. The main drivers aren’t going to be customer preferences for one form of money over another. They’ll be the contingent factors that shape developer adoption -- more like the dynamics that drive which software platforms or frameworks take off. Some big unknowns: ❓What will be the “killer apps” for blockchain-based payments? ❓Which financial infrastructure stacks will early builders pick when making architectural decisions?...

On September 17th, the FDIC issued a notice of proposed rulemaking (NPR or Proposed Rule) that would impose on FDIC-insured depository institutions (IDIs) new recordkeeping requirements for custodial deposit accounts with transactional features. Comments are due 60 days after publication in the Federal Register. In addition to inviting comments on all aspects of the Proposed Rule, the FDIC requests comments on specific questions (see attached). The Proposed Rule is partially in response to the bankruptcy of Synapse, a technology company that worked with several IDIs and fintech companies....

BJ Sanford advises payments and fintech companies, U.S. and foreign banks, trade associations, investors, and policy and consulting firms. His practice centers on payments regulation, public policy, and the regulation of bank activities and structure. He also advises clients on regulatory capital, bank investments and control, affiliate transactions, the U.S. operations of foreign banks, and regulatory examinations. Payments regulation. BJ advises payments firms and banks on payment regulation, product development, and compliance with rules including Regulation E, Regulation Z, Regulation II...