Amid significant volatility in the cryptocurrency markets, as well as an uptick in crypto-related frauds and scams, Acting Comptroller of the Currency Michael Hsu today praised the “quiet trustworthiness of banks,” and highlighted the OCC’s “careful and cautious” approach to crypto activities by national banks.
The collapse of cryptocurrency exchange FTX and the concerns about the unregulated nature of crypto markets dominated a Senate Banking Committee hearing today on financial industry regulation.
Consumers most commonly reported being victimized by fraud, theft, account hacks and scams.
Issuing digitized deposits and engaging in stablecoin-related activities fall within the existing legal authority of banks, according to a white paper published today by The Clearing House.
The illicit finance risks posed by digital assets can be most effectively managed by regulating nonbank cryptocurrency companies while allowing banks to engage more fully in digital asset activities, where they will be subject to comprehensive regulation and Bank Secrecy Act requirements, ABA said today in a letter to the U.S. Treasury Department.
Only two in five people see the U.S. lagging behind other countries in creating a regulatory environment that makes it easy or safe to buy or trade cryptocurrency, although a majority also believe there should be clearer industry regulation, according to a new survey by digital currency investment adviser Grayscale.
Any such payment system should be designed to “complement” the Federal Reserve’s soon-to-be-released FedNow system, Gruenberg said.
Banks must understand the heightened liquidity risks they face from certain types of deposits from cryptoasset companies.
Regulatory bodies should resist lowering standards for crypto, Hsu said, adding that regulators have to “learn and smartly adapt.”
A new report from the Financial Stability Oversight Council today warned of the dangers that cryptocurrencies and other digital assets “if their interconnections with the traditional financial system or their overall scale were to grow without adherence to or being paired with appropriate regulation.”