Eugene Ludwig, a former financial controller, recently said that digital assets are encroaching on the banking industry. According to him, cryptocurrency companies clearly pose a threat to banking institutions. But, how could this be the case?
Crypto businesses “get away with it”
Eugene Ludwig was a Comptroller of the Currency from 1993 to 1998, during the administration of Bill Clinton. He recently claimed that fintech and crypto companies are competing with banking institutions, but with fewer rules. According to him, this allows them to get away with it. serious fact, these new types of companies offer their services unsupervised. They proceed to the receipt of deposits and the granting of loans without any control. This situation could lead to the next recession, according to Ludwig.
The former financial controller does not take kindly to the fact that the FED is spear in the cryptocurrency industry by endorsing the development of a CBDC. He believes that the experience of deposit will eventually be entrusted to the government and will no longer be the prerogative of banking institutions. This goes create multiple problems that banks can avoid by taking back control instead of letting go.
Note that Eugene Ludwig is currently managing partner of Canapi Ventures which is an investor in the fintech sector. In 2018, he approved a major decision by the Office of the Comptroller of the Currency. The regulator had decided to allow fintech companies to file applications for a banking-type license. But, since 2021, it has become more strict about granting this license to cryptocurrency companies.
For Eugene Ludwig, it is obvious that banks must be more aggressive in the cryptocurrency sector. These institutions must regain control or risk disappearing, leaving their place to fintech and crypto companies.
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