Michael Hsu, admitted his skepticism towards cryptos during two related thematic conferences on October 11th. The Comptroller of the United States, said crypto is “an immature industry based on immature technology”. The adoption of cryptocurrencies is increasingly common while it presents enormous risks. The head of the OCC (Office of the Comptroller of the Currency) wanted to draw attention to the increase in these risks and conflicts. It highlights the need for a more complete and accurate view of the dangers of this booming industry. For him, the crypto sector still needs to put in a lot of effort to convince regulators.
Michael Hsu: cryptos present many risks
Michael Hsu was clear that the crypto industry is immature and based on immature technology. He believes the industry still has to deal with the growing volume of scams, hacks and fraud. There is still a long way to go for the crypto sector to convince regulators.
He also decried the integration of cryptos into the traditional financial system without a more precise and complete view of the risks. Indeed, digital currency giants are increasingly encouraging the use of blockchain technology which offers many services. These services would be similar to those consumers expect from banks, investment companies and brokerage firms.
This is how the biggest crypto players want to offer an increasingly diverse range of services. Services done “seamlessly and under one roof for their customers,” Hsu said. He added that the mix of these activities can provide some convenience to consumers. But also, this blend can also offer cost savings to cryptocurrency businesses, according to Hsu. But conflicts are growing, and the riskiest activity threatens the whole system, he told DC Fintech Week.
Rules must be developed to limit the risks
Hsu took charge of the OCC last year. And since then he has focused on how banks should handle cryptos. Although US regulators have played down systemic risks, they have warned of possible systemic dangers from the widespread adoption of stablecoins. Hsu is skeptical of the real usefulness of cryptocurrencies. However, he cannot say for sure that crypto is useless and should go away.
Hsu said regulators should coordinate their efforts to write rules to mitigate the risks associated with cryptos. He also stressed the need for information sharing with counterpart agencies. But also, he thinks it necessary to try to understand the risks and opportunities in this sector. All of this can help ensure that regulatory standards remain high and the level playing field remains.
So were those remarks in separate comments at a Harvard Law School event on Tuesday.
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