- Acting OCC head suggests close monitoring on crypto firms.
- The OCC chief thinks the task is too big for a single regulatory body to handle alone.
- He calls for greater cooperation from federal and state regulators.
Michael Hsu, the acting chief of the United States Office of the Comptroller of the Currency (OCC), has expressed his desire to close the gaps in crypto firm supervision that currently exist.
At the Federal Reserve Bank of Philadelphia’s Fifth Annual Fintech Conference, Hsu advocated for consolidated oversight of crypto firms, in which regulators or an authorized group would oversee a company and its subsidiaries to mitigate risk.
Hsu is resolute that no crypto firm is subject to rigorous scrutiny and oversight. This means that regulating eyes can miss things and situations, which can lead to risks.
Hsu suggests that to implement the idea there needs to be more cooperation, less parochialism, and more interdependence between regulatory agencies.
The idea of consolidated supervision of crypto firms cannot be single-handedly executed by OCC or any other single regulatory body.
So OCC volunteers to lead the path and asks for great cooperation from federal and state partner agencies to execute the ideas.
Hsu believes that regulatory bodies should be proactive in their approach to crypto if they do not want to end up like AIG subsidiaries.
The company experienced a large-scale collapse during the 2008 financial crisis, which could’ve been prevented with consolidated supervision.
Hsu added,” Historically, a crisis or unexpected failure would provide the impetus for updating the bank regulatory perimeter and bringing those who need regulation into the perimeter. Our collective experience with derivatives in the late 1990s and leading up to the 2008 financial crisis, however, suggests that proactive prevention may be a better path.”
It was not too long ago Michael Hsu intended to collaborate with regulators like the Fed and FDIC. The regulators combined efforts to create a unified banking framework for crypto.