In a comment letter to the OCC yesterday, BAFT – ABA’s global payments subsidiary – made several recommendations in response to the agency’s recently released whitepaper on responsible innovation. The association stressed the importance of fostering collaboration and innovation, particularly in the rapidly-evolving area of distributed ledger technology.
Specifically, BAFT called on the OCC to modernize the current regulatory model; allow the private sector to take the lead with respect to innovation; avoid undue regulatory restrictions that stifle innovation; regulate according to the risk of the activity, rather than the technology utilized; and coordinate with other regulatory authorities to facilitate innovation on a global basis to avoid overlapping, complex requirements and ensure consistency.
“While the financial sector has always strived to develop innovative tools and products to better serve its customers, the rates of investment in new technologies and progress of innovation over the past several years is virtually unparalleled,” the letter said. “We are grateful for the OCC’s leadership in supporting innovation and for its recognition of the important role technology will play in providing greater financial inclusion, more robust, efficient and cost effective financial tools, and more secure transaction capability, while protecting the safety, soundness, and integrity of the global financial system.”