- The Acting Comptroller of the Currency of the U.S. has advised caution for banks looking to offer cryptocurrencies and digital assets.
- Michael Hsu, a former Federal Reserve official and current Acting Comptroller of the Currency, made the statement at the virtual conference of the CBA.
- According to Hsu, regulatory efforts are being made to adapt to a rapidly changing financial landscape.
- Under the Senate Infrastructure Bill, the United States is discussing the taxation of cryptocurrencies.
One of the major revolutions brought about by cryptocurrencies has been in the financial industry. Having been touted as a replacement for financial institutions, banks have looked to leverage on the growing industry, with a number of them already investing in crypto.
Crypto has seen the likes of Standard Chartered, BNY Mellon, Goldman Sachs, Citi Bank, UBS, Morgan Stanley, JP Morgan Chase, and a long list of others, delve into the industry. However, Michael Hsu has different advice for banks.
Micheal Hsu Advises Banks To Heed ‘Better Angels’ on Crypto
Micheal Hsu, a former Federal Reserve official who currently serves as the Comptroller of the Currency, has advised banks to be cautious as they look to offer cryptocurrencies to their customers.
Speaking at the virtual conference of the Consumer Bankers Association (CBA Live), Hsu explained that interest from the banks in cryptocurrencies has increased over the last 12 to 18 months. Hsu attributed this increasing interest to growing consumer demand.
According to Hsu, banks should consider “better angels” before contemplating a crypto offering, rather than chasing clients’ dollars. Hsu has made the assertion amidst increasing regulatory tension from authorities.
Crypto Offerings Need a Regulated Environment
In an earlier statement, the acting comptroller Michael Hsu shared his concerns about cryptocurrencies and banks looking to offer digital assets to their customers.
The OCC’s acting boss opined that the rapid digitization of digital services today has been accelerated by the Covid-19 pandemic. He thus stated that, for the offering of digital assets to work, there needs to be a collaborative approach from authorities.
He further stated that there needs to be more work, especially from financial regulators to ensure that fintechs, payment platforms, and digital assets fit properly into the regulated system.
On The Flipside
- The crypto market has recently witnessed a number of major hacks (DAO Maker and Poly Network as the highest profile of them) and scams, which have highlighted the need for more regulations.
- Despite the intensifying push for the regulation of the crypto industry, the market has experienced substantial growth.
- The crypto industry has topped $2 trillion amidst the regulatory saga.
Crypto Regulation Efforts Get Intense
August has brought a new wave of intensity to the regulation and control of cryptocurrencies, trading exchanges, and DeFi apps.
The United States is currently discussing the regulation and taxation of cryptocurrencies under the Senate Infrastructure Bill, which is endorsed by the White House.
The EU Commission has also unveiled a proposal for stricter rules to be applied to the crypto market. This comes as the commission strives to gain the upper hand against financial crimes in the crypto sector. The proposal has been marred by controversies since its announcement.
Hsu explained that;
“These efforts seek to adapt to a rapidly changing landscape, in a coordinated manner across agencies, to facilitate responsible innovation while limiting regulatory arbitrage and races to the bottom”
Why You Should Care?
The regulation of Crypto has been a hotly debated topic since the inception of the industry. Getting regulations right will bolster the growth and use of cryptos, while an erroneously erected framework could cripple the industry.