U.S. officials are on the prowl to fill the role of top bank regulation, and their latest candidate is no friend to the crypto space.
The current U.S. administration is preparing to introduce a new candidate for the position of top banking regulator within the Office of the Comptroller of the Currency (OCC). Two candidates were already dropped due to skirmish within the Democratic Party.
Saule Omarova is undergoing a vetting process from the Biden administration for the role. Omarova has an impressive resume, which includes a professorship in banking law at Cornell University Law School. Though the process is still in the early stages, if Ms. Omarova takes the role this could mean a more hostile future for cryptocurrencies in the United States.
Despite flying under the radar since her work during the Bush administration, Omarova’s academic writings show she is anything but out of touch. She highlights the risks banks take on by participating in the cryptocurrency related ventures. One of the major concerns she urges banks to consider is how digital currencies could bring on additional trading outside the gaze of federal regulators.
Those native to the crypto space perhaps welcome such an idea. With the recently proposed bill from the Senate, the rules for any other form of operation within the space could change.
U.S. Regulations In the Spotlight
If Saule Omarova steps into the role, potentially the OCC’s grip on crypto businesses could tighten. The Securities and Exchange Commission (SEC) already set in motion new policies to police the crypto markets.
Gary Gensler, head of the SEC, recently spoke out about creating a robust crypto regulation force.
The latest OCC candidate could certainly take a more firm stance on regulating financial technology companies, such as crypto start-ups and exchanges. The areas of the operation increasingly overlap with that of banks and traditional financial institutions. Until now fintech companies remain less vulnerable than banks simply because they are not them.
This could change given Omarova’s takeover.
Continued Backlash from U.S. Officials
Perhaps it’s no surprise the next candidate for the OCC role is one with a tougher stance on crypto. In recent weeks, along with hints of regulation changes, some prominent U.S. officials are speaking out against crypto.
Most notably is Senator Elizabeth Warren. In an open letter to Treasury Secretary Janet Yellen, Warren called the crypto market full of “threats” and asked for more defined regulations to be set in place.
Mentioned above, SEC overseer Gary Gensler also expressed worry over an unregulated crypto market. For those closely tied to law appointments and traditional finance, the world of crypto is still the Wild West. However, for long-time veterans of the space, the cryptoverse is losing some of its autonomy.
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