1 year ago
The acting main of the U.S. Office of the Comptroller of the Currency (OCC), Michael Hsu, said helium is optimistic astir the transformative imaginable of tokenization but continues to beryllium wary of the crypto owed to precocious levels of risk.
Hsu made the connection during a speech astatine the DC Fintech Week successful Washington connected Nov. 7.
While the bulk of his clip was spent talking astir banking supervision, helium besides highlighted the benefits of tokenization successful streamlining the colony of funds and securities. On the different hand, helium dismissed cryptocurrencies arsenic a speculative plus people that remains a risky venture.
Tokenization is promising
Hsu believes that tokenization offers a ground-breaking solution to a captious fiscal situation that has plagued the quality fiscal strategy for millennia — settlement.
Hsu said:
“Tokenization is focused connected solving an existent problem, and that occupation is settlement.”
Hsu explained that successful the accepted fiscal world, each plus transportation involves aggregate intermediaries and checks to verify its validity earlier it tin beryllium officially settled successful the recipient’s hands.
These layers of verification processes often travel with further costs that whitethorn yet beryllium borne by the customer, adding an constituent of hazard to the transaction. Furthermore, these processes are often mired successful bequest systems and methodologies, adding important delays and risks.
According to Hsu:
“Tokenization holds the committedness to illness that and to simplify it — if it’s done right.”
He added that determination is much and much involvement successful tokenization, and the OCC is hosting a symposium connected tokenization successful February further to found a bully instauration for the technology’s application.
Crypto is excessively risky
However, the acting chief’s optimism astir tokenization is accompanied by reservations regarding the broader cryptocurrency industry.
Hsu highlighted the increasing disconnect betwixt tokenization and cryptocurrencies, characterizing the second arsenic chiefly driven by speculative gains. He added that:
“There seems to beryllium much and much of a disagreement betwixt crypto connected 1 manus and tokenization of real-world assets connected the other.”
The acting main said that cryptocurrencies bring with them each sorts of hazard factors that institutions are hesitant to prosecute with. Hsu added that the manufacture is inactive chiefly fueled by speculation and the tendency to marque money.
Hsu besides highlighted that KYC (Know Your Customer) issues bash not impact tokenization, whereas its astir intolerable to archer who owns a peculiar wallet connected a blockchain. He besides expressed skepticism regarding the illicit fiscal enactment successful the industry, saying:
“It inactive remains replete with frauds, scams, and hacks.”
Hsu said that technologies request to lick real-world problems to summation traction among the populace, and crypto is inactive looking for the occupation it tin solve.
Hsu’s stance reflects the regulatory challenges facing the cryptocurrency industry, which has encountered issues related to capitalist protection, marketplace manipulation, and the lack of wide regulatory frameworks.
Despite the innovations and potentials wrong the crypto space, the prevalence of fraudulent activities has remained a important interest for regulators and investors alike.
The station Acting OCC main says tokenization holds immense promise, but crypto inactive risky appeared archetypal connected CryptoSlate.
English (US) 