The Office of Foreign Exchange Control (OCC) of the United States considers Binance and Tether to be high-risk companies with a bad history in the cryptocurrency market.
Acting Head of the Office of Foreign Exchange Control, Michael J. Hsu, speaking on November 3 to the American Council on Fintech at the 2021 Fintech Policy Summit,
called on to strengthen regulation of large cryptocurrency companies, especially stablecoin issuers.
According to him, large universal cryptocurrency companies, especially issuers of the most popular stablecoins, should be subject to comprehensive consolidated supervision. Therefore, federal and state banking regulators should first develop HR and supervisory policies to safely move such companies into the banking regulatory area.
“This would differentiate safe and reliable cryptocurrency companies from businesses that are only partially regulated with a poor track record of control, such as Binance and Tether.”
The Acting Chairman of the OCC expressed concern about the rapid expansion and mixing of wholesale and retail activities in a number of cryptocurrency companies. According to him, against the background of this trend, the question arises, “Should the division of activities in the cryptoindustry be made according to the Glass-Steagall type?” This law was introduced in 1933 and restricted investment and commercial banking. It was then canceled in 1999. Michael J. Hsu warned that the rapid growth in user numbers and overall market value in the crypto industry is accompanied by an increase in fraud and user complaints.
“Move fast and break stereotypes” is a common mantra in innovative technologies. In the context of financial services, remember that these ‘stereotypes’ are people and their money. ”
Stablecoins are under intense pressure from regulators around the world and especially in the United States. Recently, the US President’s Working Group on Financial Markets called for increased supervision of stablecoins. In October, the Securities and Exchange Commission (SEC) received the authority to regulate the stablecoin market and announced increased supervision over them. In September, the European Union announced that it intends to tighten laws on regulation of stablecoins.
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