OCC Chief Urges Caution on Crypto Regulation

Regulators should not rush to regulate the cryptocurrency industry, upholding high standards in their work. This view was voiced by the acting Comptroller of the Currency, Michael J. Hsu.

Acting Comptroller of the Currency Michael J. Hsu discussed cryptocurrency and the regulatory perimeter in remarks to the @Harvard_Law and Program on International Financial Systems’ Roundtable on Institutional Investors and Crypto Assets. Read more at https://t.co/wzNX0tqIJI pic.twitter.com/dbBvaRbGae

— OCC (@USOCC) October 11, 2022

In a speech at Harvard Law School, Hsu noted that agencies must “learn and adapt prudently” to ensure safety and fairness in the industry. In his view, regulators are susceptible to FOMO in the context of digital assets and therefore act in haste.

«In dozens of private conversations I’ve had with bankers, scholars, regulators and policymakers, they admitted that they really do not understand and do not trust cryptocurrency as it exists today […]. Yet they feel pressure to join in order not to fall behind or be seen as opponents of progress», — noted Hsu.

He said there are two approaches to regulation: to tame or to adapt. The official expressed concern that the U.S. authorities have chosen the second option. Tight inter-agency collaboration, he said, could fix the situation.

Hsu also added that he remains crypto-skeptical, but pointed to the importance of developing blockchain.

«My skepticism about cryptocurrencies stems from disappointment that the most promising innovations have been displaced by hype and a focus on trading,» he explained.

Earlier, Michael Hsuallowed growth in trust in stablecoins with proper oversight. The regulatorpromised in 2022 to publish additional guidance on integrating cryptocurrencies into banks’ product lines.

In April, the officialadvocated tightening regulation of stablecoin issuers and urged treating them as depository institutions with mandatory deposit insurance.

In September Coinbase chief Brian Armstrong criticized the approach of US authorities to industry oversight.

Prior to that, Cardano founder Charles Hoskinsonexpressed the view that regulation of digital assets should be conducted via a public-private partnership modeled on the Internet.

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