Regulators Focus On Crypto | PYMNTS.com
In his Semi-annual report on the risk outlook, the Office of the Comptroller of the Currency (OCC) has elevated digital assets in banking to one of the top four operational risks facing the banks it oversees.
While this is remarkable in itself, it is a proactive step to regulate cryptocurrency and stablecoins before they become a threat to not only America’s banking and financial system, but the United States. whole world, which many financial experts think they are.
Read more: ECB President warns Stablecoins could ‘threaten’ monetary sovereignty
And this is remarkable because historically the US financial regulation is a study on the closing of the stable door after the horse has escaped.
See: US Considering ‘Regulatory Perimeter’ For Cryptos, Report Says
More recently, the risk-management-focused Dodd-Frank Act added hundreds of new rules and established the Consumer Financial Protection Board as it sought to clean up the mess that allowed the subprime mortgage crisis to unfold. 2008 to plunge the economy into a severe recession. . But examples date from the creation in 1791 of the First Bank of the United States in the National Banking Act of 1863, which ended the crises of the “free banking” era in which chartered banks were ‘State issued their own currency by establishing federal charters. Among other things, he created the Office of the Comptroller of the Currency (OCC) to issue and regulate these charters
Details: Janet Yellen, US Treasury, pushes for stablecoin regulation
So by raising the threat level of crypto in the Dec. 6 report, Acting Currency Controller Michael Hsu is doing something he – and officials ranging from Treasury Secretary Janet Yellen to Chairman of the Reserve Federal Jerome Powell – Hope to let them out in the face of a crisis for once.
Read also : European central banks demand strict cryptocurrency regulations
In this, US regulators are not alone. Proactive regulation of cryptocurrencies is an increasingly popular trend around the world, and this ranges from the EU’s aggressive pursuit of preventative regulation to India which talks about following China’s lead by outright banning cryptocurrencies.
Related: India re-announces plan to ban cryptocurrencies as digital rupee advances
While this added nothing new to recent announcements that in 2022, Hsu’s office is partnering with the Federal Reserve and FDIC – an agency created in the aftermath of the Great Depression – “to clarify whether certain activities related to crypto-assets managed by banks are legally permitted and provide expectations for safety and soundness, consumer protection and compliance with applicable laws and regulations, ”the announcement was a statement by intention.
Agencies hope to establish rules on issues such as custody of cryptocurrencies, helping clients buy and sell digital assets, crypto asset return loans, issue and use stablecoins, and banks holding assets. cryptographic data in their balance sheets.
Read also : As the ambitions of crypto companies grow, calls for SPDI charters multiply
This has met with some opposition, including Wyoming Senator Cynthia Lummis’ attempt to block Federal Reserve Chairman Jerome Powell’s reappointment for – does this sound familiar to you? – what she called the central bank’s illegal delay in approving state-issued SPDI charters that would give crypto companies permission to act as banks for things like custody and to provide crypto owners with an entry and exit ramp between their digital wallets and bank accounts.
On the flip side, Powell recently backed Senator Lummis on stablecoins issued by state banks, calling Yellen’s position that dollar-indexed cryptocurrencies should only be issued by chartered banks. federal government of “puzzling”.
See more : Powell and Yellen clash over Stablecoin regulation in Senate hearing
Miles to go
Talking about regulation is one thing. To do so is another, and not everyone is impressed by the attempts to regulate surveillance agencies.
One of the multi-agency attempts at the highest level to put in place a coherent and proactive crypto regulatory policy was the November 1 release of the President’s Financial Markets Task Force on Stable Coins.
While the idea is good, the results weren’t, Tom Brown, general counsel for Nyca Partners, recently told PYMNTS’s Karen Webster.
See: Nyca’s Tom Brown: U.S. Banks, Regulators Unprepared for Crypto-Based Real-Time Payments Disruption
The review of stablecoin policies showed “more of a battle for territory than a coherent articulation of policy,” said Brown, “If you step back and look at the wide array of digital currencies, there is no clearly articulated administration policy “.
One problem, he said, is that US regulators are focusing on regulating “institutions, not industries.” This leaves their focus on how cryptocurrencies will affect their territory, he argued.
“For the Office of the Comptroller of the Currency, for example, it’s the federally chartered banks,” he said. “For the Securities and Exchange Commission, it’s brokers and exchanges. For the Commodity Futures Trading Commission, these are derivatives exchanges. For the Federal Reserve, it’s payments and monetary policy.