Developing Contingency Plans: The NYDFS Mandate on Licensed Virtual Currency Businesses -

The events surrounding COVID-19 have increased the use of fintech products, both out of necessity and convenience. Shelter-in-place directives have moved customers towards fintech solutions, as have concerns aligned with the World Health Organization’s statements encouraging people to use contactless payment methods, with the reminder that bank notes may transfer bacteria and viruses.

Some governments, such as South Korea and countries in Africa, have taken steps in response to the pandemic to encourage movement to fintech solutions. When governments assess best practices in light of the current crisis, regulations in many countries may change to remove barriers placed on the industry. Facilitation of the entry and use of fintech solutions will likely be paired with strengthened reporting obligations on businesses involved in digital payments, banking and investing, including in relation to virtual currency. As more customers seek to handle banking, trading and payment transactions through digital means, regulators are expected to take stronger measures to monitor the use, protection and security of the data collected and assets transferred or held digitally.