Distributed ledger technology and decentralized finance (DeFi) will turn the traditional banking sector into an archaic structure, according to Brian Brooks, head of the Office of the Comptroller of the Currency (OCC).
He argues that as decentralization progresses, banks will lose their role as money aggregators. In a similar fashion, electronic services disrupted traditional mail.
“People need financial services; they don’t need banks,” said the head of the OCC at the DC Fintech Week conference.
Brooks did not rule out that in the future banks will focus on asset management and custody services. Instead of aggregating money, they will take on the role of payment networks and become nodes within blockchains.
Earlier, the OCC allowed national banks and federal savings associations to hold cryptographic keys to cryptocurrency wallets. Interest in providing such services was expressed by U.S. Bancorp and PNC Financial Services Group.
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