In a recent discussion, Joey Garcia, the Director and Head of Regulatory Affairs and Public Relations at Xapo Bank, shared his experiences and thoughts on the evolution of digital asset regulation. Collaborating with CryptoSlate Senior Analyst James Van Straten, Garcia shed light on the hurdles and achievements encountered while shaping regulatory frameworks for digital assets.
Joey Garcia’s involvement with Xapo Bank dates back to 2014 when he was introduced to Wences Casares, a prominent figure in the digital assets realm. Casares approached Garcia with the idea of creating a regulatory framework for cryptocurrencies in Gibraltar. Despite facing resistance and skepticism initially, Garcia and his team persevered. This dedication led to the inception of a regulatory framework in Gibraltar by the end of 2017, positioning the jurisdiction as a trailblazer in digital asset regulation.
Garcia emphasized the significance of building a prudential regime that surpasses mere compliance requirements. By staying ahead of the curve and implementing a framework that surpassed the standards set by the FATF, Gibraltar was able to attract key players in the digital assets industry. The framework was meticulously crafted to tackle the complexities of the ever-evolving crypto landscape.
With extensive experience working with various countries, conducting gap analyses, and providing training to regulatory bodies, Garcia possesses a unique insight into the global regulatory environment. His consultancy role with the United Nations allows him to contribute to regulatory capacity-building initiatives worldwide. Garcia stresses the importance of adapting regulatory approaches to suit local contexts and address specific challenges that each country faces.
Xapo Bank’s commitment to security and compliance sets it apart in the cryptocurrency sector. Transitioning from being the largest Bitcoin wallet provider to a fully licensed bank, Xapo prioritizes safeguarding customer assets. Garcia highlighted the bank’s rigorous security measures, maintaining a 100% liquidity coverage and exceeding this requirement by maintaining a 3,000% liquidity ratio.
In envisioning the future of regulatory frameworks within the crypto industry, Garcia underscores the importance of trust and reliability. He believes that the trustworthiness and credibility of service providers will be pivotal in fostering the adoption of crypto services. Garcia asserts that educating stakeholders about the disparities between regulated custodians and other platforms is crucial for cultivating a transparent and trustworthy ecosystem.
Joey Garcia’s narrative provides valuable insights into the challenges and opportunities inherent in crypto regulation. His collaborative efforts with Xapo Bank and diverse regulatory bodies illuminate the necessity of a proactive and well-informed approach to shaping the landscape of digital finance. As the industry continues to evolve, Garcia’s vision for a secure and innovative financial ecosystem resonates with the need for bridging traditional finance with the world of digital assets.