Binance and Tether were singled out by the regulator reportedly risky blockchain space.
Acting Comptroller of the Currency Michael J. Hsu asked for greater regulation of universal crypto firms in remarks given at the American Fintech Council's 2021 Policy Summit.
“Large, universal crypto firms—especially issuers of highly-circulated stablecoins—should embrace comprehensive, consolidated supervision. At the same time, federal and state bank regulators should prioritize the development of policies, staff and supervisory approaches to bring such firms safely into the bank regulatory perimeter. This would clearly differentiate safe and sound crypto firms from those that are regulated only partially and have a history of control lapses, such as Binance and Tether.”
The Office of the Comptroller of the Currency is in charge of regulating federally chartered banks operating business in the United States. Hsu further said:“The rapid expansion and mixing of wholesale and retail activities at some crypto firms raise the question of whether there ought to be Glass-Steagall-like separation of activities in the crypto space."
Glass-Steagall, a federal law passed in 1933 that separated investment and commercial banking and was revoked in 1999. Finally, Hsu gave a caution, “In the cryptocurrency space, the rapid growth in users and total market value has only been matched by the growth in scams and consumer complaints. 'Move fast and break things' is a common mantra in tech. In the financial services context, it is important to remember that those “things” are people and their money.”
Senate Republicans pressurised OCC nominee Saul Omarova to turn over her Marxism college thesis in October. The OCC is expected to issue guidance to banks on how to hold cryptocurrency assets in the near future, in coordination with other regulators. Tether's commercial paper reserves were first scrutinised by Hsu in January.