The acting comptroller of the Office of the Comptroller of the Currency (OCC), Michael Hsu, is in favor of bank-like regulatory obligations for stablecoin issuers as the potential scope of the collateral damage "will continue to grow as long as crypto expands."
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In a speech at the Transatlantic Finance Forum's Executive Roundtable, Hsu pointed out that stablecoin issuers subject to bank regulation would give stablecoins holders "confidence that those coins were as reliable and "money good" as bank deposits."
"Even if the tide were to go out, the reserves would be there, overseen and examined by bank supervisors, and potentially even back stopped by access to a central bank’s discount window to meet short term liquidity needs if warranted," Hsu added.
The OCC head emphasizes: regulating stablecoin issuers as banks could enable "more innovation" in the cryptocurrency market. While innovation thrives in uncertain environments, solid foundations can help, especially when it comes to money and trust, Hsu believes.
In May 2021, Hsu warned the regulator will review its actions related to the cryptocurrency market. According to Hsu, the regulator's previous cryptocurrency initiatives "were not done in full coordination with all stakeholders." In January that year, when Brian Brooks served as Acting Comptroller of the regulator, the OCC allowed US national banks and trust companies to run independent nodes and distributed networks as well as issue their own stablecoins.
According to the OCC's previous statement, banks "may use new technologies, including INVNs and related stablecoins, to perform bank-permissible functions, such as payment activities."
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