Micheal Hsu, the Acting Comptroller of the Currency, presented a paper to the Exchequer Club. He titled it “Safeguarding Trust in Banking.” He discussed a lot of things in the paper which focused on the state of banking and transparency.
Foremost, he commented that “regulators did not act in a coordinated fashion.” This lacunae, he noted, dented the traditional financial system. Thereby allowing crypto industry-players to breach some laws and go scot-free.
According to Micheal, decentralized finance and financial technology are two novel technologies that have disrupted the finance industry. He focused majorly on how DeFi had “bypassed” the usual system.
At this point, he said, the traditional financial systems should synergize with DeFi. He commended the ongoing “crypto policy sprint” where the federal banking agencies are agreeing on definitions and every necessary detail with the DeFi world.
“While controlling the growth of crypto and defi is challenging given their nature and in light of market demand, it is imperative that financial regulators work together to ensure that crypto/defi activities that take place within the banking system or are facilitated by banks are trustworthy,” he said.
Finally, Michael talked about the need for safety in the finance industry. According to him, as much as innovation is important, safeguarding trust is more important. Thus, this will require the regulators to ensure that everything is done within the confines of the law.
“These goals cannot be achieved if the financial regulatory agencies, including state banking supervisors, do not work together. Public trust in bank regulators will rise or fall depending on our ability to do so,” Micheal concluded