Leading US Banking Regulator worried about the Capitol Hill’s Repealing of Pro-Crypto Regulations

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Acting Currency Controller and former Coinbase legal officer, Brian Brooks, said he was worried that members of the Congress were advising the incoming Biden administration to abolish pro-crypto legislation in the name of politics.

In a recent interview with the CNBC Squawk Box, Brooks cautioned that Capitol Hill could cancel some of the progress made by the Office of the Controller of the Currency (OCC) in the regulation of the crypto industry.

“All of this is happening in an environment where we’re about to have a change of presidential administrations and there’s calls on Capitol Hill to dismantle some of the regulatory protections we put in place for this stuff. So, you think about the fact that my agency is trying to make it safer for people to custody in national banks, we’ve talked about banks supporting some of these stablecoin projects.

If those protections aren’t in place, I really worry about the environment for these kinds of things. So that’s what I’m most focused on, is how do we preserve the safety for people who want to participate in that market.”

Since Brooks took the helm of the OCC in May, the Agency has taken crypto-friendly measures, including a decision granting banks the right to take ownership of crypto assets.

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With a change in government guard looming, Brooks says the future of the crypto industry could go two directions.

“We’re at a really critical inflection point right now. It’s kind of a fork in the road. So one path forward is that we find ways of addressing money laundering risks and we find ways of addressing terrorism financing, which I think can be done, but we make this safe for the consumers and investors to participate. That’s why the banking system has such an important role to play.

The other path, which is a very real potential here, is that we politicize some of these tech issues, whether it’s crypto or fintech more broadly. We politicize it by undoing all of the good work this administration has done to make it safer, to make it more real, and if we do those things, as for example, Chairwoman Maxine Waters’ letter recently suggested, then I’m not sure if we have enough of a foundation to move forward here. So it’s all about consolidating regulatory gains and consumer protections that we’ve tried to put in place.”

The Currency Acting Controller also explains what he thinks the position of the government should be in overseeing the Crypto Sector.

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“The role of the government is to make sure that the markets are well-regulated and well-organized so that people who are transacting know that they are transacting with good people, and not bad people. Part of that means, as in any financial markets, there has to be tracing and no anonymity. Part of it also is if you hold crypto or if you’re in any other space like this, you need to know that you’re not going to lose it. 

That’s why it’s vital for people to be able to hold their assets in a bank, for example, the same way that you can keep your stock certificates or any other assets that you own.

Right now, this is a true political discussion. People may not know this, but there is leadership in Congress that encourages the new Biden administration to scale back some of these protections. In the name of politics, I suppose, not in the name of protecting investors.”

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