US regulator bullish on DeFi future
- Brooks calls for regulation of the DeFi industry.
- Crypto enthusiasts hail his opinion piece for being groundbreaking.
- Brooks time in office could just.
The Acting Comptroller of the Currency, Brian Brooks, has written a new opinion piece where he clamored for people to be prepared for “self-driving banks.”
According to Brooks, whose new piece details why the decentralised finance (DeFi) industry should have a 21st century regulation, said that the banking industry was also going the path of self-driving cars through DeFi.
Brooks, who was a former top executive at Coinbase, noted that DeFi’s ability to deliver financial services without the need for a human intermediary has turned banking on its head. He added that DeFi brings in an avalanche of opportunities in the form of new interest rates, making financial services more inclusive and also ending corruption and fraud that were being perpetrated by human handlers of the banking industry.
The Acting Comptroller, however highlighted that this new technology brings with it a new level of challenges to the banking industry. One of such risks is the level of required liquidity as there would be a high level of sell-off due to the numbers of trades. He also identified another challenge to be the industry’s volatility and the loan-collateral management needed to run the industry.
He added that the absence of federal regulation has led to the national market’s haphazard development. So, there is a need for a federal regulator who will properly determine the regulatory scheme and examine banks that exist only as a software. And how these banks can properly serve the communities at large.
Brooks piece garners positive reviews from the crypto community
Members of the crypto community have praised Brooks’ new piece for being forward-thinking and a landmark moment for the nascent DeFi sector.
According to Jake Chervinsky of Compound Finance, Brooks’ opinion on DeFi is an insightful take on crypto regulation. He added that the US needed the type of forward-thinking leadership that Brooks offered to build more innovative financial products.
Another enthusiast of the community Jay Hao of OKEx, said that the opinion piece had given him some level of confidence about the future of DeFi.
Brooks days in office are numbered.
However, rumors exist that Brooks could leave his office in a matter of days as the new administration is expected to resume office by the 20th of this month.
Brooks has drawn criticism from US members of Congress who had expressed consternation for the OCC’s pro-crypto outlook since he took over.
Under Brooks, crypto companies could now file for national banking charters. Not only that, but the agency also approved banks to make use of public blockchains and stablecoins as a means of processing payments.