The House Financial Services Subcommittee on Digital Assets, Financial Technology, and Inclusion recently held a significant hearing to address the impact of new technologies on the financial sector. Representatives from federal agencies, including the Federal Reserve, SEC, and OCC, testified about the increasing influence of digital assets, distributed ledgers, and artificial intelligence (AI). The hearing highlighted the need for robust supervision of digital assets, a focus on AI risks, and a cautious approach to implementing distributed ledger technology in banking. The agencies discussed various issues related to cryptocurrency, with the Federal Reserve announcing a new supervision program to manage risks associated with cryptocurrency and DLT. The SEC’s FinHub has also dedicated significant attention and resources to DLT and digital assets, developing a comprehensive guide to determine if digital assets qualify as securities. The OCC emphasized a prudent approach to implementing DLT in federal banking and noted the industry’s interest in tokenizing real-world assets and liabilities. The agencies also addressed the risks associated with AI, including data challenges, explainability, bias, cybersecurity, and consumer protection. Banks have started using AI in fraud monitoring and customer service, and the Federal Reserve is collaborating with other agencies to monitor banks’ use of AI. Overall, the hearing highlighted the need for comprehensive legislative guidance on digital assets and the importance of examining the effects of AI on customers and the financial services industry.

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Information	Details
Geography	North America
Countries
Sentiment	neutral
Relevance Score	1
People	Michael S. Gibson, French Hill, Valerie A. Szczepanik, Mark Mulholland, Donna Murphy
Companies	FDIC, Office of the Comptroller of the Currency (OCC), OCC, House Financial Services Subcommittee on Digital Assets, Federal Reserve, Consumer Financial Protection Bureau (CFPI), and Inclusion, SEC, Financial Technology
Currencies	None
Securities	None