“MiCA released a regime that was a starting point, and it gives us boundaries to work from. And then we moved to the US, and now we see GENIUS, and we grow, and we iterate from there.“

“I scare everyone in the bank with my [laptop’s] crypto sticker,” joked Jennifer Lassiter, Managing Director and Head of Digital Assets, Americas, UK, and Europe at Standard Chartered, as we sat down for an interview at Money20/20 in October. Nestled in a quiet-ish corner of the Venetian expo hall, we dove into Standard Chartered’s unique position as a G-SIB with a large presence in emerging markets, the bank’s crypto-focused activities, and its view on global crypto regulation.

Notably, Lassiter and Standard Chartered see crypto regulation as a multi-jurisdictional and iterative process. MiCA served as a foundation for GENIUS, which further influenced the rules of the road in the UK, Singapore, and elsewhere. A cross-border initiative like blockchain-based payments needs that kind of call-and-response rulemaking, Lassiter explained, and can help mitigate the risks involved in migrations into new financial infrastructure and stores of value. 

The following has been edited for length and clarity. 

Standard Chartered has long been in the digital asset space and often has stood pretty alone, or in sparse company, as a crypto-friendly G-SIB. What do you see happening in terms of institutional adoption of crypto assets and technologies, and where do you see Standard Chartered in relation to that momentum? 

The activity that we’ve been doing in our global network is important context, because it explains why we’re able to move the way that we are moving in the US. We’re a UK-based bank, and we have a strong foothold in Singapore, Hong Kong, the Middle East, and Africa, which involves connecting emerging markets with the global economy. Because of that history, we’re operating in regions where cryptocurrency or digital asset activity has been around for a while. 

The second thing is that we’re used to dealing with markets where local currency is not as stable, or there are certain capital controls or cash controls that allow access to currencies to be a bit more challenging. So we have the risk frameworks and the compliance governance in place to manage that type of instability in those markets, and that lends itself to an easier transition into how we deal with digital asset capabilities in the various markets that we’re in. 

Lastly, most banks have some sort of venture vehicle where they’re investing in smaller startups. We’ll see a market need around certain activity, but aren’t sure which solution is commercially viable, and Ventures is a place for us to run ahead and learn from that, and that’s where you’ll see Zodia custody, or Libeara out of Hong Kong, which is our tokenization platform. And through the learnings in those institutions, we’ve now come back into a place where, for example, we use part of Zodia custody in our bank custody platform, and now we have custody that is live in the DIFC in Hong Kong, and that will be launched live in the spring of next year. So that is possible because we’ve been able to learn from our venture investments, and then we’ve been able to expedite what is really building out the governance structure around that capability, and turning that capability into a business-as-usual activity for the bank.

What are the implications of that for your US-focused activities? 

We’re on the ground in DC, having conversations advocating for banks’ participation as we’re going through the rulemaking process, following the legislative process, and we have an administration that’s very open and collaborative with industry. We’ve had incredibly meaningful conversations about the objectives that we’re trying to achieve through policy, which is a broad crypto ecosystem that is part of the mainstream financial ecosystem, in which banks provide safety and soundness. 

Where do tech companies fit into this? GENIUS gave them a possible path into stablecoin issuance and greater involvement in crypto finance.

You are correct that GENIUS had a really specific carve-out for technology companies and how they could or could not participate in stablecoin issuance. I think one of the things I appreciate about GENIUS being released — and this is not a really sexy topic, so it doesn’t get picked up a lot, but I think it is really important background — is that, if you look at GENIUS and you look at MiCA, around 75% of GENIUS is MiCA, and then it grows from there. We are now seeing regions we operate in [iterate from there] — Singapore is a great example. They’re looking at GENIUS and saying, How should we adjust GENIUS and make it work for Singapore? And the UK is saying, What do we build from GENIUS to become a competitive player? This is a new way of doing regulation, and I think it’s really underreported. 

MiCA released a regime that was a starting point, and it gives us boundaries to work from. And then we moved to the US, and now we see GENIUS, and we grow, and we iterate from there. It’s a very healthy way to do global transformation from a policy perspective, especially when the benefits of the technology really are only seen when you start to get that cross-border pipeline. So I share that because I think there are pieces of GENIUS that need to be iterated on, and there are vehicles to do that through the rulemaking process, or even through amendments on the floor, from a legislative perspective. And rules around tech companies’ activities, as defined by GENIUS, will be part of this. But getting that first round of guardrails out was critical, and I think not perfect, and that’s okay. 

In your view, where will digital assets fit into larger financial ecosystems?

There’s no asset class that’s going to win out over the others. It’s not that type of competition. It’s a very plural future, and the winners are going to be the players that can accommodate and participate in all of the economies in the various ways that domestically, they have decided to participate in, and then are able to connect those economies together. There will be roles for smaller intermediaries in those domestic spaces, but for the larger global institutions, I think the key is being able to meet your clients where they’re at in the regions that they’re operating in and the regulations found there. 

I get really nervous when people are like, is it Bitcoin or CBDCs? There are going to be solutions for everyone in every region, regardless of what they’re trying to achieve.

So maybe to extrapolate a little from what you said, it sounds as though some of those tech companies probably need to be still in a bit of a holding pattern until there’s clarity through the CLARITY Act, or some other unambiguous rules of the road. 

You’re actually touching on something that I feel like several years ago was a talking point, and it’s just coming to fruition now. Who is a tech company? What is an intermediary? How are those relationships legally defined? Here’s an ecosystem that’s enabled by this new technology to cross borders and to enable access to movement of stores of value in whatever shape they come. And what is the technology that is underpinning that, and who can enable that? Is it a big tech company? Is it a small fintech? I imagine that Big Tech is going through what big banks are going through, which is what we just discussed — it’s an evolution around our strategy and how we’re helping support our clients as they enter into this space.