As digital asset prices fall, according to a top US financial regulator Wall Street of banks to cryptocurrencies interest has waned considerably.
U.S. Banks’ Interest in Cryptocurrencies Has Dipped
“Most of the cryptocurrencies have vanished,” Michael Hsu, vice chairman of the Office of the Currency Controller, said in an interview Thursday at Bloomberg’s Washington office. “I would be stunned by so many banks saying, ‘Hey, I really want to get into crypto now’,” he said.
He added that it is very different from the interest shown by banks at the end of last year when the price of the largest digital asset, Bitcoin, was at an all-time high and the total crypto market was valued at more than $3 trillion.
The crypto industry has had its fair share of turmoil over the past few months, with prices plummeting, the TerraUSD stablecoin crashing and, more recently, the explosion of FTX.
Hsu said the current “crypto winter” has given US banking regulators more time to consider substantive guidance on issues such as crypto custody.
Last November, the OCC, the US Federal Reserve and the Federal Deposit Insurance Corporation announced that they had launched a “policy push” on crypto assets. Given the intense interest of banks, there was an urgency to address this issue.
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According to Hsu, the spillover from failures in the digital asset industry hasn’t spread much into the banking industry due to what he calls the “careful and cautious” approach of the regulator.
That said, he has always been concerned that banks could potentially fall through gaps and expose more than they should to crypto.
*Not investment advice.