Despite incessant backlash from regulators in the United States, the adoption and growth of digital currencies have been steady over the past few years.
Considering this position, Michael J. Hsu, the Acting Comptroller of the Office of the Comptroller of the Currency (OCC) has advocated that regulators should collaborate with major crypto intermediaries in order to get a grasp of how the ecosystem functions.
Michael made this advocacy while speaking at the Transatlantic Finance Forum on the topic of “The Future of Crypto-Assets and Regulation,” Michael pointed out that crypto exchanges, Non-Fungible Tokens (NFTs), and the metaverse are some of the major ways people are gradually getting to associated with the digital currency ecosystem at the moment.
“The mainstreaming of crypto has occurred despite regulatory and legal 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?” he said, based on an excerpt from his speech.
With the growing popularity of this nascent industry, many banks and financial institutions are now pushing for ways to get involved in the space, a move that Michael said should be considered only when the banks involved have developed the necessary capabilities to go into crypto.
Additionally, the OCC boss pointed out that based on the frail regulatory position of the industry, it can be easy to lose trust in digital currencies, should a situation arise where liquidity is hampered. While noting the good positioning of banks to keep trust, Michael advocated a careful analysis of the tech supporting the crypto ecosystem carefully.
“While banks and trust companies have a long and successful history of custodying and safeguarding assets, the technology underlying crypto and the associated governance with certain tokens present a host of novel issues warranting careful analysis and consideration,” he concluded.
Michael’s comments come on the back of crypto CEOs testifying before the US Congress last year as both parties seek to help contribute to the regulation of the industry.Image source: Shutterstock
