The currency’s Acting Comptroller, Michael J. Hsu, emphasized the need for collaboration and coordination with major crypto intermediaries to better understand the risks within the growing $2 trillion cryptocurrency market.
Speaking of Speaking at the Transatlantic Finance Forum on “The Future of Crypto-Assets and Regulation,” Hsu pointed to the different places — crypto exchanges, non-fungible tokens (NFT), and Metaverse — where anyone with an internet connection can invest, adding:
“Crypto has been mainstreamed despite regulatory and legal uncertainty and a series of scams, hacks and other disruptive events. For financial regulators like me, this raises a multitude of questions. What should regulatory attention focus on? what should be done By whom? And why?”
According to Hsu, the Office of the Comptroller of the Currency (OCC) reminded banks to demonstrate their capabilities before receiving federal permission to engage in crypto activities.
The Acting Comptroller also highlighted the rising risks in crypto as holders of USD-backed stablecoins have confidence that they can redeem their stablecoins for USD at face value when needed, no questions asked:
“But what if that trust falters or is lost? Stablecoin holders, knowing that whoever redeems first has the highest chance of getting their money back, would sensibly redeem immediately.”
Hsu calls for cooperation with crypto intermediaries to minimize the consequences of a loss of trust in crypto. “While banks and trust companies have a long and successful history of storing and securing assets, crypto technology and related governance with certain tokens present a host of new issues that require careful analysis and consideration,” he concluded.
At his confirmation hearing last week, Federal Reserve Chair Jerome Powell confirmed that the agency will release a new report on digital currencies, although it’s “not quite where we should have it yet.”
New digital currency legislation coming soon
– Tom Emmer (@RepTomEmmer) January 11, 2022
As Cointelegraph reported, Powell highlighted the ongoing changes in monetary policy that are expected to evolve with policies surrounding the potential launch of a Central bank digital currency in the United States:
“The report is really done and I would expect that we will release it in the coming weeks – I hate to say it again.”
