Acting Comptroller Michael J. Hsu talked about the potential of cryptocurrencies and where the $2 trillion industry is heading towards at the Transatlantic Finance Forum on the topic of “The Future of Crypto-Assets and Regulation.” Hsu also acknowledges the NFT industry and ‘property’ in the metaverse.
Crypto industry growth
Hsu talked about how far the crypto world has reached with Tesla accepting Dogecoin, followed by AMC Theatres and Starbucks also accepting crypto. He noted that several publicly listed companies like MicroStrategy also hold Bitcoin (BTC) on their balance sheet, and even countries and cities have participated in the growth of Bitcoin like New York, Miami, and El Salvador.
Hsu also said that:
“Sixteen percent of U.S. adults say that they have owned, traded, or used some form of cryptocurrency. Notably, the underbanked and minorities have been especially interested in crypto.”
According to Hsu, “one survey found that 37 percent of the underbanked indicated that they own cryptocurrency, compared to 10 percent of the fully banked.”
Stablecoins pose threat
Stablecoins have always been under the crosshairs of regulatory authorities. Hsu pointed out that stablecoins are the oxygen of the crypto industry and bridge the gap between cryptocurrencies and fiat. As they are backed by US dollars, the holders trust that their share of USD will return to them whenever they want.
“What if, however, that trust were to waver or be lost? Stablecoin holders, knowing that the first to redeem would have the highest chance of getting their money back, would rationally redeem immediately,” said Hsu.
Therefore Hsu called for ‘bank regulation’ and suggested that to prevent market runs and maintain the trust of the investors, stablecoin issuers must be subjected to bank regulation. He also suggests a collaborative effort of several regulatory authorities to regulate the crypto space and prevent the loss of trust in the holders.