The United States’ top banking regulator is concerned that the Biden government will reverse some cryptocurrency regulations designed to protect consumers. This includes allowing national banks to custody cryptocurrency assets deployed during the Trump administration.
Acting Currency Controller Brian Brooks shared several concerns about cryptocurrency regulations in an interview with CNBC last week.
Brian Brooks is the administrator of the federal banking system and director of the Currency Controlling Office (OCC). The OCC supervises nearly 1,200 national banks, federal savings associations and federal branches of foreign banks.
He was asked to comment on the recent bitcoin bull run from a regulatory standpoint. Brooks replied:
I will tell you what concerns me is that all of this is happening in the environment where we are about to have a change in the presidential administration, and there are calls on Capitol Hill to dismantle some of the regulatory protections that we have put in place for this thing.
OCC gave the green light Banks under its supervision to provide cryptocurrency custody services in July. Brooks explained that his agency “is trying to make custody of national banks safer for people.” He added: “We have already talked about the banks that support some of these stablecoin projects. If these protections aren’t in place, I really care about the environments for that kind of thing. That’s what I’m most focused on. How we preserve the safety of people who participate in this market. “
He noted that “we are at a really critical tipping point right now, that’s what I would say to you. It is a kind of fork in the road. ” He began to outline two paths for the regulation of cryptocurrencies. “One way forward is to find ways to deal with the risks of money laundering and to deal with the financing of terrorism, which I think can be done. But we make it safe for consumers and investors who participate, which is why the banking system has such an important role to play ”, he said, adding:
The other path that is very real potential here is that we politicize some of these technology issues, be it cryptocurrency or fintech more broadly. We politicize this by undoing all the good work this government has done to make it more secure, to make it more real.
Brooks then referred to Congresswoman Maxine Waters’ letter urging the Biden government to reverse some of the regulations that the OCC established. Among the recommendations was termination allowing national banks and federal savings associations to provide custody cryptocurrency services. Regarding the suggestions that Waters made in his letter, Brooks said:
If we do these things, I’m not sure if we have a sufficient basis to move on. It is all about consolidating regulatory gains and consumer protection that we are trying to implement. This has to stop here.
He further detailed that “The role of the government is to ensure that markets are well regulated and organized so that people who are trading know that they are trading with good people and not bad people”. He emphasized:
Part of this means that, as in any financial market, there must be tracking and not anonymity.
The interim currency controller clarified that people who have cryptocurrencies need to know that they will not lose them. “That’s why it’s important for people to be able to custody their assets at a bank, for example, in the same way that you can custody your stock certificates or any other assets you own,” Brooks said.
“This is a real political debate now,” noted Brooks, emphasizing:
People may not realize this, but there is a leadership in Congress that is asking the new Biden government to reverse some of these protections. I think in the name of politics, not in the name of protecting investors.
The Financial Crimes Enforcement Network (FinCEN) recently proposed a new regulation for cryptocurrency wallets. Public comments can be submitted before January 4. Meanwhile, the U.S. Securities and Exchange Commission (SEC) is taking action against a number of cryptocurrency companies for selling unregistered securities, including Ripple Labs.