OCC: Crypto – A Call to Reset and Recalibrate05.26.2022
Acting Comptroller Hsu spoke at the DC Blockchain Summit 2022 about the vulnerabilities in theframework and recent volatility with .
Acting Comptroller Hsu spoke at the DC Blockchain Summit 2022 yesterday about the vulnerabilities in the #cryptocurrency framework and recent volatility with #stablecoins. Read his full remarks: https://t.co/msHtwi4hir#blockchain #digitalassets pic.twitter.com/vhnSk0LUVY
— OCC (@USOCC) May 25, 2022
As many of your members know, I have been a crypto skeptic. In speaking to the Blockchain Association last year, I warned of risks in the crypto space, including unexplainable and unsustainably high yields and “innovation” for innovation’s sake.1
What has become clearer to me since then is that these developments are indicative of the crypto economy’s dependency on hype. Hype is needed to generate the interest and investment that are key to creating the “flywheel” of growth that crypto projects seem to need to get off the ground.
The recent collapse of the TerraUSD stablecoin and associated sell-off in crypto markets has shown that hype-driven growth can lead to bubbles, harm consumers, and crowd out productive innovation. I will say more on this in a bit.
Stepping back, though, I would like to share three high level observations from the perspective of a bank regulator.
The full speech can be read here.
Fidelity continues to hire thousands to support cryptocurrency.
The SETL/Colendi enterprise is preparing a new public blockchain infrastructure.
In May CME Ether futures had the highest volumes since launch.
The bipartisan Responsible Financial Innovation Act will create a regulatory framework for digital assets.
The bank said a regulated, transparent and fully backed stablecoin has great potential.