U.S. Banking Watchdog OCC Makes Case for Tokenization, Just Not on Public Blockchains

  • Policy
  • June 16, 2023
  • No Comment
  • 42

OCC Chief Michael Hsu, an outspoken critic of crypto currencies, cited asset tokenization as the future, but noted centralized efforts would likely prevail in the long run.
Michael Hsu, acting head of the U.S. Office of the Comptroller of the Currency (OCC), recently noted that tokenization of assets represents an exciting development in finance; however, decentralized blockchains may prove too challenging to sustain this movement.

Hsu announced at an American Bankers Association event on Friday that reaching decentralization, security and scale simultaneously is “not possible with a public blockchain.”

“As a result, the crypto industry remains mostly self-referential and detached from real life,” according to Mr. Lee. Furthermore, this sector remains immature and rife with risks despite years of mainstream coverage, billions in venture capital investments, and millions of hours dedicated to code commits.

Advertize Me on LinkedIn (ADEMENT)
As stated by U.S. banking regulators such as the OCC, involvement in crypto requires precise scrutiny from institutions they regulate; yet some financial firms – including Wall Street banks – have experimented with managing their own blockchain projects. Hsu believes centrally-run and trusted blockchains offer greater potential to deliver security while scaling efficiently while tokenization does not necessitate decentralization or trustlessness.

“Tokenization promises to streamline instruction, transaction and settlement into one step – provided the technology can interoperate with central bank money and real-world settlement systems”, explained Gellert. To fully realize tokenization’s potential however, legal foundations for its implementation need to be set.

Recommended to You:
Crypto Markets Analysis: Bitcoin and Ether Trading Activity Declines As Investors Anticipate FOMC’s Next Interest Rate Hike
Musk Announces Milady Meme for Ordinals
Student Organizations Active in DeFi Protocol Governance
Read About It Here: Wall Street Giant DTCC Hits Crypto Milestone for Trade Finance Industry

Edited by Sheldon Reback. Subscribe to StateofCrypto, our weekly newsletter covering cryptocurrency and government issues.

By clicking “Sign Up”, you agree to subscribe to CoinDesk newsletters and offers from partners as well as our terms of services and privacy policy.

Please be aware that our privacy policy, terms of service, cookies and do not sell my personal information have all been updated.

CoinDesk, the premier source for news and information on cryptocurrency, digital assets and the future of money, strives to meet the highest journalistic standards while adhering to an editorial policy set forth by Digital Currency Group, an investment company focused on investing in cryptocurrencies and blockchain startups. As an independent operating subsidiary of DCG which invests in such startups as well as in employees such as editorial employees who may receive exposure through DCG stock appreciation rights – though journalists cannot purchase DCG stocks directly.

Jesse Hamilton is CoinDesk’s deputy managing editor for global policy and regulation. He does not possess any cryptocurrency at the present time.

Find out about Consensus 2024, CoinDesk’s longest-running and most influential event that brings together all aspects of crypto, blockchain and Web3. Register and purchase your pass at consensus.coindesk.com now!

Related post

Leave a Reply

Your email address will not be published. Required fields are marked *