Michael Hsu, Control of the Currency says that policymakers may be spending too much time on cryptocurrencies.
A top US banker said his caution over banks that do business with fintechs is not meant to block those deals, but reflects his concern that companies must fully assess their risk.
Michael Hsu, acting Currency Editor, also told Reuters in an interview that policymakers may be spending too much time and energy thinking about electronic moneyat the expense of figuring out how best to police other types of financial technology.
“Look, banking-fintech partnerships, they’re here to stay. I’m not trying to get rid of them,” Hsu said on Wednesday. “This is the future, so let’s make the future right.”
BANK ON FINTECH
In a comment last month that raised eyebrows in financial services industryHsu said that the Office of the Comptroller of the Currency has observed partnerships between banks and fintechs growing at an “exponential rate” and becoming more complex.
“My strong sense is that this process, if left to devices on its own, is likely to accelerate and expand until there is a serious problem or even a crisis,” says Hsu. at that time.
Republicans in the House of Representatives criticized Hsu’s comments in a letter to the head of the OCC on Tuesday, arguing that the technological innovation enabled by the banking-fintech partnership had allowing banks to reach underserved customers.
Hsu explained on Wednesday that his concern about banks and fintechs joining forces is the possibility that risk oversight responsibilities can become messy as multiple companies, sometimes with different incentives each other, sharing responsibility.
“When everything is done in the bank, we know exactly Who take responsibility when things fall apart,” he said. When you start chopping these things up… and business different models, that’s when the risk can go away. “
Hsu said the proper regulatory approach to fintech partnerships is still unclear, as the agencies are working to deal with the various issues and then identify the authorities that will use.
CRYPTO OPTIMIZATION
Regarding cryptocurrencies, Hsu said he is really worried about policymakers Conference and regulators are trying too hard to harm other areas.
“We are spending too much time on crypto,” he said. “Interestingly, it has its conundrums…but in regards to other banking and technology issues, I think we are currently overweight crypto.”
The rapid rise of cryptocurrencies and related products such as stablecoins has attracted the attention of many government agencies, including the OCC, the Securities and Exchange Commission, and the Treasury Department, and even is the focus of executive orders from the President. Joe Biden.
In Congress, lawmakers are rolling out a variety of measures to establish some sort of regulatory framework for cryptocurrencies.
But Hsu warns that with so many policymakers focused on this one Faced with emerging financial technology issues, other issues more relevant to banks can be overlooked.
“Cryptocurrency just takes up so many brains space give a lot Everyoneboth on [Capitol] Hill and the management community,” he said. With the persistence of brain space occupation, I started to worry because we weren’t giving our time and attention to something else. “
