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The interim currency monitor, michel j. hsu, highlighted the need for collaboration and coordination with large crypto intermediaries to better understand the risks in the growing $2 trillion cryptocurrency market.
speaking at the transatlantic finance forum on the topic of “the future of crypto-assets and regulation”, hsu pointed out the various venues — crypto exchanges, nonfungible tokens (nft) and metaverse — where anyone with an internet connection can invest, adding:
“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?”
According to hsu, the currency controller's office (occ) reminded banks to demonstrate their ability before getting federal permission to engage in crypto activities.
The interim comptroller also highlighted the growing risks in crypto as holders of usd-backed stablecoins trust that they can exchange their stablecoins for us dollars upon request, at par, without asking any questions:
“what if, however, that trust were to waver or be lost? stablecoin holders, knowing that the first to redeem would have the highest chance of getting their money back, would rationally redeem immediately.”
Hsu calls for collaboration with crypto intermediaries to minimize the impact of a loss of confidence in crypto. "while banks and trust companies have a long and successful history of asset retention and protection, the technology underlying cryptography and the governance associated with some tokens present a host of new issues that warrant thorough analysis and consideration," he concluded.
At her confirmation court last week, federal reserve president jerome powell confirmed that the agency will publish a new report on digital currencies despite not being "quite where we had to get it."
new digital currency legislation coming soon
— tom emmer (@reptomemmer) january 11, 2022
as cointelegraph reported, powell highlighted ongoing changes in monetary policy, which is expected to address policy surrounding the possible rollout of a central bank digital currency in the united states:
“the report really is ready to go and i would expect we will drop it — i hate to say it again — in coming weeks.”
