Howard Chang, the Chief Strategy Officer of EssentaTor Inc., spoke at the Money20/20 Middle East conference on behalf of the Arab Investment Liquidity Strategic Fund (EAC Fund). In his speech, he addressed the impact of regulations, stablecoin policies, and AI-based infrastructure on financial resilience and national competitiveness.
The Importance of Financial Regulations
Chang urged central banks to combine close oversight with regulations that can adapt to digital finance. He emphasized that regulations should support market stability and integrity, but outdated frameworks may limit responsible innovation and access to emerging infrastructures. He stated, "Tier one regulations create space for responsible markets. Tier two regulations follow the markets, and tier three regulations close the markets."
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Proposed Frameworks for Innovation
Chang referred to recent developments in the United States and examined the GENIUS Act regarding stablecoins and related proposals for regulating the digital asset market. He introduced these measures as examples of regulatory clarity that supports innovation.
Chang also emphasized that the one-to-one backing of stablecoins is seen as a liquidity and redemption framework, not as a requirement for asset stability. He stated that US dollar stablecoins can expand dollar liquidity through continuous cross-border settlement networks. However, the issuance of a stablecoin in local currency does not automatically create international demand, and this depends on currency liquidity, market depth, settlement connectivity, and practical use cases.
Chang defined monetary governance as interaction at a global level while maintaining internal stability, policy control, and the role of local currency.
Chang's speech included three proposed frameworks. The first framework is an integrated dual model that maintains local currencies as the basis for domestic activities while providing access to fully backed dollar stablecoins for liquidity and cross-border settlement. Coordinated oversight can help manage currency flows, allocate reserves, and address currency risks.
In the second framework, Chang introduced an AI-based accounting framework for banks and payment institutions that includes AI-driven customer services, instant settlement, stablecoin compatibility, and greater operational efficiency. The goal of the EAC Fund is to assist central banks in creating innovation frameworks that help domestic institutions modernize their legacy systems.
The third proposed framework includes interoperable accounting standards that cover the identification, assessment, settlement, risk management, and disclosure of stablecoins and other digital assets. Chang stated, "True stability is not immobility. Real governance requires continuous evolution." Through the EAC Fund, EssentaTor aims to collaborate with central banks and financial institutions on institutional credit, financial infrastructure, and responsible digital finance adoption.
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