Nobody Puts Blockchain in a Corner: The Disruptive Role of Blockchain Technology in the Financial Services Industry and Current Regulatory Issues

Abstract

This Note examines the disruptive effects that distributed ledger technology will have on payment systems and the financial services industry. It discusses how financial technology companies and banks will need to adapt to ensure that American consumers and banks, as well as the American economy at large, remain secure and efficient within an increasingly online and global financial system. This Note argues that the disjointed digital currency licensing regimes and complex landscape of state-by-state money transmission licensing directly threaten to stifle innovation, capital formation, consumer protection, and national cybersecurity. To ensure the U.S. remains competitive in the global financial revolution, and to ensure consumer protection, this Note advocates for the U.S. to adopt a principles-based approach to regulating innovative payments and financial technology (“FinTech”). It concludes that a limited purpose national FinTech charter should be implemented in the U.S. and discusses how it would correspond with the joint proposed rule by the Office of the Comptroller, Department of Treasury and Federal Deposit Insurance Corporation for cybersecurity standards.