US financial authorities are preparing to take a more active role in regulating $1.5 trillion Cryptocurrency marketAmid growing concern that the lack of proper oversight threatens to harm savers and investors.
The new effort reflects a break with the Trump administration, which in some cases has encouraged the use of cryptocurrencies in the financial system. But it may take some time to pay off as US regulators struggle to determine who has the legal authority to oversee the volatile market.
In an interview with the Financial Times, Michael Hsu, who was appointed this month as the acting currency controller, said he hopes US officials will work together to create a “regulatory ocean” for cryptocurrency.
“It’s really about coordination across agencies,” said Hsu, who heads the Treasury office that oversees national banks. “Just talking to some of my colleagues, there is an interest in coordinating a lot of these things.”
Cryptocurrency has been on a roller coaster ride this year. In February, the price of Bitcoin rose next Tesla founder Elon Musk He said the company invested $1.5 billion in cryptocurrency, reaching a record high of over $60,000 in April.
But price dropped انخفض After Chinese regulators signaled a crackdown on the use of digital currencies, Musk backtracked on a move to allow bitcoin payments for Tesla cars, citing environmental concerns. Other cryptocurrencies have seen similar fluctuations.
One sign of the new US approach came this month with the first meeting of the Interagency Cryptocurrency Team, which included officials from the three main regulators of federal banks – the Hsu’s Office of the Comptroller of the Currency, the Federal Reserve and the Federal Reserve. Deposit insurance company.
Hsu said the team’s goal was not to create policy but to “put some ideas for the agencies to consider” as they try to catch up with growth in the Cryptocurrenciess.
“It’s small and big,” Hsu said of the working group. “The idea is that time is of the essence, and if it’s too big it gets harder.”
The Securities and Exchange Commission and the Commodity Futures Trading Commission also discussed how to protect investors in the cryptocurrency market.
Gary Gensler, head of the SEC, told a House committee last week that there are “gaps in our current system,” noting the potential need for legislation to determine which regulator should oversee crypto exchanges.
Gensler said his goal is to provide “similar protection to exchanges where crypto assets trade as you might expect on the New York Stock Exchange or the Nasdaq.”
Gensler said the Treasury Department has focused on “anti-money laundering and protection against illicit activity” in the crypto market. Treasury Secretary Janet Yellen said she fears bitcoin will be used “often for illicit financing.”
By installing Hsu in the OCC, Yellen also indicated a change in the cryptographic approach. Hsu is, as he put it, “a professional public servant and bank supervisor at my core.” Among his predecessors at the OCC under Donald Trump was Brian Brooks, the former legal head of Coinbase, a crypto exchange, and now the CEO of Binance. United States, a competitive currency exchange.
As one of Hsu’s first acts at the OCC, he asked staff to review a Trump-era decision to grant national trusts to companies that provide crypto custody services.
While Hsu believes there is no turning back on innovations like the blockchain technology used in cryptocurrencies, he said in his testimony to Congress this month that the current enthusiasm for banking innovation reminded him of the years leading up to the financial crisis.
The danger is that the new and improved methods lead to a “large and less regulated shadow banking system”. Today, fintech companies and technology platforms are creating payment processing tools that “show promise,” he said, “but also have risks.”
“For me, it’s hard not to feel some déjà vu,” Hsu told lawmakers.