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US Needs to Have Clear Rules on Crypto

Brian Brooks, the head of the US regulatory agency, spends his days attempting to calm the cryptocurrency industry’s raging seas.

“If there’s bad activity in crypto, we need to get rid of it,” the head of the Office of the Comptroller of the Currency (OCC) said in an interview at the LA Blockchain Summit today. However, “If we’re going to get the benefit of these radical new technologies that will make credit more accessible, that will help those people who have not been included in the old system, we gotta figure it out.”

Formerly the top lawyer for Coinbase, Brooks has advocated for the clarity of cryptocurrencies ever since becoming the acting Comptroller of the Currency, a role he just got in April this year.

In July, the OCC had clarified that regular banks could custody the cryptocurrencies. Then last month, it has been described that banks can hold the companies’ reserves that issue stablecoins.

“Over time, these blockchains may really just be payment [systems],” said Brooks about the stablecoins. “If so, we need to start providing some clarity to banks about the circumstances in which they can support those blockchains and at some time can use it in the future,” he said recently.

“We’re working with our other agencies to ensure that there’s clear and consistent messaging on that.”

Brooks had beat similar drums while working at Coinbase; there, he has helped the start of Crypto Ratings Council, a (toothless) industry organization where members, mostly exchanges, work together to know which assets have constituted the US securities and were consequently safe to list.

“Simply saying [crypto’s] different so we have to throw up our hands—as you can probably tell, that’s not my style,” he said in a recent interview.

The institutions are “hostile” to crypto, he stated, although the regulators haven’t put onward a framework to diminish risks.

“What we’re trying to do is just provide clarity,” he said. “The market can only develop organically if there’s clarity.”

The Government should stick to rule-making

Brooks had also rejected the Fed’s timeline for FedNow, a public, decentralized payment platform version of the dollar. A Federal Reserve governor stated that the projects could not be out within three to four years.

“When the government promises you [something] four years out, what they’re sort of saying is, ‘we doubt any of you are going to remember that we said this.” He continued, “If you can’t deliver the product in six months, you’re probably not going to deliver it at all.”

“The government is really good at establishing rules,” but not products. “Why do we think that would be different in constructing a payments system?” He said his central focus is to ensure that the US has retained its position as a global finance leader.

And when it comes to a digital dollar? “The role of governments isn’t to produce tech,” he said.

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