FinTechs and cryptocurrency companies that compete with banks without having to follow as many regulations “get away with murder,” Eugene Ludwig, comptroller of the currency during President Bill Clinton’s administration, said on Tuesday (September 6).
Speaking during a panel at The Clearing House and Bank Policy Institute’s annual conference in New York, Ludwig argued that the lack of oversight of these companies could lead to the next recession, Bloomberg reported.
Ludwig added that if the Federal Reserve endorses a central bank digital currency (CBDC), the deposit experience will shift away from banking and toward government, which the report says will bring “all sorts of problems.”
Banks should “take back turf rather than let turf move away” and “be allowed to play more aggressively in crypto markets,” he said in the report, noting that the current trend is to do the opposite. Ludwig served as the currency’s auditor from 1993 to 1998 and is now a managing partner at Canapi Ventures, which invests in FinTechs.
His comments came days after a major effort by Congress to create stablecoin regulations stalled. While negotiations appear to be ongoing, they will likely go beyond what the calendar allows.
Continue reading: US stablecoin law hits a snag as negotiations collapse
Lawmakers originally planned to introduce a bill this week, but there are still numerous issues to be resolved, including the role of state regulators, the possibility of an official digital dollar in the future, and how money held by crypto platforms should be addressed .
While the bill was due to be released weeks ago, at eleventh hour there was a request from the Treasury Department to add a provision to keep crypto customers’ money legally segregated from the assets of the companies they deal with, which is what Things reportedly slowed down even more.
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