Acting Comptroller for the Currency Michael J. Hsu demanded greater regulation of universal cryptocurrency firms in remarks he made at the American Fintech Council’s 2021 Policy Summit.
“Large, universal cryptocurrency firms, especially those that issue highly-circulated stablecoins, should be subject to comprehensive, consolidated supervision. Federal and state regulators of banks should focus on the development and implementation of policies, staff, and supervisory approaches that will bring these firms into the regulatory framework. This would make it easy to distinguish safe and sound crypto companies from those that are only partially regulated and have a history lapses in control, like Binance and Tether.
The regulatory oversight of federally chartered banks within the United States is provided by the Office of the Comptroller of the Currency. Hsu further declared:
“The rapid expansion of retail and wholesale activities at certain crypto firms raises the question of whether it is necessary to have a Glass-Steagall-like separation between activities in the crypto space.”
Glass-Steagall, a federal law from 1933 that prohibited investment and commercial banking was repealed by Congress in 1999. Hsu warned that the rapid growth of users and total market values in cryptocurrency has been only matched by consumer complaints and scams. Tech is known for its mantra, “Move fast and break everything.” It is important to remember, in the context of financial services, that these “things” are people’s money and their people.
Saul Omarova, OCC nominee, was forced by Senate Republicans to hand over her college thesis about Marxism. In coordination with other regulators the OCC is expected to soon issue guidance to banks about how to hold cryptocurrency assets. Hsu began to examine Tether’s commercial papers reserves in January.