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ARTICLE · 11 NOVEMBER 2021

OCC Calls For Regulation Of Crypto Banking

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On November 3, Acting Comptroller of the Currency, Michael J. Hsu, remarked at the American Fintech Council's Fintech Policy Summit 2021 about the growth in the digitalization of banking...

United StatesTechnology
Moorari K. Shah
Moorari K. Shah
A.J. Dhaliwal
A.J. Dhaliwal
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On November 3, Acting Comptroller of the Currency, Michael J. Hsu, remarked at the American Fintech Council's Fintech Policy Summit 2021 about the growth in the digitalization of banking including the trend and attendant risks associated with keeping cryptocurrency outside of the bank regulatory system (we discussed Hsu's previous remarks on crypto trends and risks in an earlier Consumer Finance & FinTech Blog post here).  Hsu noted that the cryptocurrency space includes "synthetic banking providers" (SBPs) who "operate out of the reach of bank regulators and free of bank rules."  Hsu explained that "[m]any of these universal crypto firms hold themselves out as regulated.  But this is a half-truth."  Hsu also argued that the "rebundling" of banking activities of taking deposits, making loans and facilitating payments by fintechs and the fragmented supervision of universal crypto firms pose significant risks to consumers, businesses, and financial stability.

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