thecoinrise.com
Michael J. Hsu, the Acting Comptroller of the Currency, stressed the importance of communication and partnerships with significant crypto players in order to better comprehend the risks in the $2 trillion industry.
Hsu, who spoke at the Transatlantic Finance Forum on the topic of “The Future of Crypto-Assets and Regulation,” highlighted the various sites — crypto exchanges, non-fungible tokens (NFT), and the metaverse — where anyone with internet access can invest.
He adds, “The mainstreaming of crypto industry has occurred despite regulatory uncertainty and a series of scams, hacks, and other disruptive events. For financial regulators like me, this presents a host of questions. Where should regulatory attention be focused? What should be done? By whom? And why?”
OCC has advised banks to connect with crypto businesses
The Office of the Comptroller of the Currency (OCC), according to Hsu, has advised banks that they should demonstrate competency before receiving federal permission to engage in crypto business.
Regulators all over the world including India, are expressing concerns over the risks and frauds associated with the crypto industry. The acting Comptroller also mentioned the growing risks in crypto, citing the perception that holders of USD-backed stablecoins can exchange their stablecoins for US dollars on demand, at par, with no questions asked:
“What if, however, that trust were to waver or be lost? Stablecoin holders, knowing that the first to redeem would have the highest chance of getting their money back, would rationally redeem immediately.”
New digital currency legislation coming soon👀
— Tom Emmer (@RepTomEmmer) January 11, 2022
To reduce the implications of a lack of trust in the industry, Hsu suggests collaborating with crypto intermediates. “While banks and trust businesses have a long and successful history of custody and safeguarding assets,” he concluded, “the underlying technology cryptocurrencies, as well as the associated governance with some tokens, provide a variety of fresh concerns that require careful research and consideration.”