Fintech forum aims to solve regulatory friction

The financial world is transforming at such a rate that it needs a new rule book to keep up with the changes. If regulators get the balance wrong, they either expose consumers to excessive risk or stifle innovation, which will simply go elsewhere.

So how do countries cope with a wave of highly disruptive digital innovation coupled with a growing groundswell of demand for enhanced environmental standards?

These are the thorny issue to be tackled by a Swiss-Singaporean fintech conference in Zurich between June 21 and 23. The two main themes will be decentralised finance and sustainable finance, which together are driving the financial industry into unchartered waters.

Most such gatherings either extol the virtues of innovation or point out its inherent risks. The Point Zero ForumExternal link intends to look at both sides of the coin by bringing entrepreneurs, investors, policy makers and regulators together under one roof to thrash out paths of common interest.

According to Sopnendu Mohanty, Chief Fintech Officer at the Monetary Authority of Singapore (MAS), many founders or CEOs of the world’s largest crypto finance companies will be in attendance. These will include David Marcus, co-founder of the Diem stablecoin, FTX exchange founder Sam Bankman-Fried and Robby Yeung, CEO of Animoca Brands, which invests in blockchain gaming projects.

They will rub shoulders with senior politicians, representatives from big banks, the Bank for International Settlements, the Swiss National Bank and Chinese digital payments giant Ant Group.

The sustainable finance industry is also expected to be heavily represented during the forum and Mohanti believes start-ups from both strands may end up converging on blockchain technology.

“This will be an annual platform where every possible conflict in the fintech industry can be resolved in open dialogue with regulators,” he said at a recent presentationExternal link. “No topic is off the table for open and candid discussions.”

MAS has teamed up with the Swiss finance ministry to stage this event. Daniela Stoffel, State Secretary for International Finance in Switzerland, says the “next frontier demands” are forcing policy makers to “drastically re-think the role of the state, of regulation and of central banks”. The financial sector could be witnessing “a complete change in our understanding of business models”.

This is not the first time that Switzerland and Singapore have put their heads together on the theme of finance. The two small countries have over-sized financial centres, a large appetite for wealth management and many shared values on how to run that business model. Several Swiss fintech and crypto-asset companies have also set up offices in Singapore.

Keeping up with the times is more than a cosmetic marketing exercise. Both Switzerland and Singapore have forged a reputation as global hubs for disruptive finance. But they face intense competition from jurisdictions such as Gibraltar, Germany and the United Arab Emirates.

Policy makers in the United States and European Union are busy formulating new laws and regulations to embrace blockchain finance.

Dubai has also emerged as a serious competitor with a new regulatory framework that has already poached crypto companies from Singapore.

Regulatory details will make a difference. For example, the Swiss crypto sector is right now haggling with the financial regulator over the size of cryptocurrency transactions that are permitted anonymously. Finma is leaning towards a limit of CHF1,000 per month before transacting parties are obliged to identify themselves. Crypto afficionados cry foul that anonymous transactions of up to CHF5,000 are currently permissible using other assets, such as gold.

The Point Zero Forum is hoping to establish itself as an event where frictions between disruptive technologies and regulators can be ironed out to the satisfaction of all parties.