BNY Mellon executive calls for rethinking digital asset regulation around wallet structure, breaking the existing model

Odaily News Caroline Butler, global head of digital assets at BNY Mellon, recently called for a broad rethinking of digital asset regulation so that blockchain and smart contracts are more than just a 20% incremental optimization of existing infrastructure. One of the first actions of the new acting SEC chairman was to revoke SAB 121, a move that BNY Mellon had been lobbying for since the bill was introduced.
Butler believes that regulation needs to be reimagined around the future of capital markets, which will revolve around wallet structures: “It shouldn’t fit the model we have today, because a wallet should encompass many things. This will break the model we have today, where our institutions are more segmented by asset class. We should have a use case-driven regulatory regime that governs and focuses on wallets. I think that’s a huge shift.”
Additionally, Nadine Chakar, managing director and global head of digital assets at DTCC, noted that a cultural shift is needed within the market given the firm’s division into fixed income and derivatives teams, adding: “While we are looking at disruptive technologies, I believe that innovation will only be incremental for some time before the industry can thrive.”