Clinton Official: Crypto, FinTech Threaten Banks
FinTechs and cryptocurrency companies that compete with banks without having to follow as many regulations are “getting away with murder,” Eugene Ludwig, comptroller of the currency under President Bill Clinton’s administration, said on Tuesday (September 6).
Ludwig made the comments during a panel at the Clearing House and Bank Policy Institute’s annual conference in New York, arguing that the lack of oversight of these companies could lead to the next recession, Bloomberg reported.
Ludwig added that if the Federal Reserve supports a central bank digital currency (CBDC), it would shift the deposit experience away from banking and into government, which would present “all kinds of problems,” according to the report.
Banks should “catch up rather than let the grass devolve” and be allowed to “play more aggressively in the crypto markets,” he said in the report, noting that the current tendency is to do the opposite. Ludwig served as Comptroller of the Currency from 1993 to 1998 and is now managing partner of Canapi Ventures, which invests in FinTechs.
His comments came days after a major congressional effort to create stablecoin regulations hit a snag. While negotiations are apparently ongoing, they are likely to extend beyond what the calendar allows.
Read more: US Stablecoin Bill hits a snag as negotiations break down
Lawmakers initially planned to unveil a draft of the bill this week, but there are still many issues to be resolved, including the role of state regulators, the possibility of an official digital dollar in the future, and the question of how money held by crypto platforms should be addressed.
While the bill was supposed to have a draft released weeks ago, an eleventh-hour request from the Treasury Department to add a provision to keep crypto customers’ money legally separate from the assets of the companies they deal with reportedly slowed things down. things down even more.
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