Crypto and DeFi disintermediaries in new ways, says OCC chief

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On Wednesday, speaking at a meeting of the Exchequer Club, a group of seasoned economic and financial policy professionals headquartered in Washington, DC, the Acting Comptroller of the Currency Michael Hsu delivered a remark on the subject of safeguarding confidence in the banking sector.

In the speech, Hsu named reducing inequalities, adapting to digitization, tackling climate change and protecting against complacency as top priorities for his office.

Speaking on the regulatory challenges resulting from the digitalization of the financial system, the head of the Office of the Comptroller of the Currency (OCC) listed the growing activity related to cryptocurrency and decentralized finance (DeFi) among the innovations driving changes in the banking sector, disintermediating it in new ways.

Hsu attributed previous failures of US financial regulators such as those that made the 2008 financial crisis possible to the siled nature of the operations of various regulators. The OCC boss further praised the collaborative effort of UnitedTreasury, Federal Reserve, Securities and Exchange Commission, Commodity Futures Trading Commission, Federal Deposit Insurance Corporation and his own office to coordinate regulatory policies regarding digital assets.

However, the head of the OCC did not mention any specific results of the working groups’ activity beyond the stablecoins report expected later this fall.

Notably, Hsu said there is a need for regulators to ensure that crypto / DeFi activities that take place within the banking system or are facilitated by banks are trustworthy. Given that the bulk of decentralized financial activity takes place outside the regulated banking system, it is not clear whether Hsus’ remarks can be interpreted as reflecting the OCC’s aspiration to expand its jurisdiction over financial institutions. DeFi platforms.

The OCC is an independent office within the US Department of the Treasury that is responsible for overseeing all domestic banks and federally licensed branches of foreign banks in the country. Michael Hsu became Acting Currency Controller in May of this year.

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