The pace of innovation in crypto is “exciting” and the industry’s growth presents “a host of opportunities” for banks, according to Acting Comptroller of the Currency Michael J. Hsu. The risks and pace of change mixed with a lack of standards and controls, however, makes a cautious approach to this evolving sector necessary, Hsu said yesterday at an industry event.
Hsu noted that crypto has “gone mainstream” with consumers. “Sixteen percent of U.S. adults say that they have owned, traded or used some form of cryptocurrency,” he said. “Notably, the underbanked and minorities have been especially interested in crypto. One survey found that 37% of the underbanked indicated that they own cryptocurrency, compared to 10% of the fully banked. A Harris poll reported that 18% of Blacks and 20% of Hispanics reportedly own crypto.”
This mainstreaming has occurred despite regulatory and legal uncertainty, Hsu said, adding that financial regulators need ask important questions: Where should regulatory attention be focused? What should be done? By whom and why? A good place to be begin would be in stabilizing stablecoins, he said, insisting that “bank regulation would give credibility to the ‘stable’ part of stablecoins.” He also stressed the need for a coordinated and collaborative regulatory approach domestically and internationally.