Recent events have reinforced the Office of the Comptroller of the Currency (OCC) position that lenders must ask permission before participating in the cryptocurrency industry and must show that such activity would be totally safe, the acting head of the agency reportedly said Wednesday (Sept. 7) at a conference.
Speaking at a Clearing House and Bank Policy Institute conference, Acting Comptroller of the Currency Michael Hsu pointed to the May collapse of Terra and the LUNA token and the subsequent failures, closures and staff reductions among other crypto companies, according to a Wednesday report by CoinDesk.
“The federally regulated banking system, by contrast, has been largely unaffected,” Hsu said in his remarks at the event. “I believe this is due, at least in part, to the careful and cautious approach that we adopted and intend to maintain for the foreseeable future.”
As the acting chief of the OCC during most of President Joe Biden’s administration, Hsu has been critical of crypto and has led other banking regulators in adopting policies that largely keep the U.S. banking system away from crypto, per the report.
In his remarks at the Wednesday event, Hsu also said that the increased prominence of digital banking and FinTechs could lead to a serious financial crisis.
Read more: U.S. Comptroller: FinTechs, Big Tech, Require More Attention
As PYMNTS reported in May, Hsu told an audience at a crypto event that the events with TerraUSD and other stablecoins are clear evidence that the crypto economy is dependent on hype.
See also: Crypto Economy is Dependent on ‘Hype,’ Says OCC’s Comptroller
Speaking May 24 at the DC Blockchain Summit 2022, Hsu said the high-yield rewards offered by some crypto products and the hype created around them had harmed consumers, adding “it seems that hype and yield are to crypto as user engagement is to social media.”
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