Acting Comptroller of the Currency Michael J. Hsu is equating cryptocurrencies to idiot’s gold and warns that the unregulated nature of the digital asset surroundings is reminiscent of what prompted the 2008 monetary disaster.
The Office of the Comptroller of the Currency (OCC) head additionally believes that innovation should be balanced with function and classes discovered from the previous.
Speaking on the Blockchain Association this week, Hsu says,
“I’ve seen one idiot’s gold rush from up shut within the lead-up to the 2008 monetary disaster. It seems like we could also be on the cusp of one other with cryptocurrencies (crypto) and decentralized finance (DeFi).
The 2008 disaster holds classes that may assist trade and regulators chart a greater path and keep away from repeating the errors of the previous.”
The OCC is an arm the United States Department of the Treasury. The group’s said mission is to make sure that “nationwide banks and federal financial savings associations function in a protected and sound method… and adjust to relevant legal guidelines and rules.”
Hsu’s feedback come amid a bigger push by the federal government to regulate crypto. The U.S. Securities and Exchange Commission (SEC) is embroiled in a lawsuit in opposition to Ripple Labs, and SEC chair Gary Gensler says he believes crypto is progressive, however gained’t final lengthy with out regulation.
Hsu concludes his remarks by advising,
“Financial innovation must be anchored in function. Be clear concerning the ‘why’ – not simply clear about the issue that wants to be solved, but additionally why it is crucial to clear up it. Just as a result of one thing may be innovated, doesn’t imply it ought to.
‘We want to meet consumer demand for correlation,’ was a rationale I heard many occasions within the lead-up to the 2008 disaster. Meeting that demand created vulnerabilities within the monetary system and amplified shocks.”
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