An ex-top U.S. banking regulator believes there is more potential for digital currency projects within traditional banks. Chain Bridge Partners executive, a regulatory advisory company, suggested that regulators might be wary of increased exposure to digital assets. On Tuesday, the executives spoke at New York’s Bank Policy Institute annual conference.
According to former regulators and bankers, more crypto business and innovation should be moved into traditional banking.
Gene Ludwig, an ex-top U.S. bank regulator and now head of a regulatory consulting firm, stated that the federal government does not want unregulated third parties creating their own currency at the Bank Policy Institute annual conference in New York.
Gene Ludwig says banks need to get involved with crypto with regulators backing
Ludwig stated that regulators should allow banks to participate more aggressively in crypto markets, rather than experimenting with digital currencies from the central bank. “If we are going to allow crypto at any point, the banking sector is the right place because it is regulated.”
These comments are made in the midst a “winter” for crypto markets, with asset prices plummeting and increased scrutiny by financial regulators of digital assets and firms that deal in them.
Thomas Michaud, president, and CEO of Keefe, Bruyette & Woods, compared the financial performance and economic adversity of several cryptocurrency startups with the banks’ financial performance.
He said that he believes this should be more within the banking industry because of the regulatory framework surrounding banking.
Crypto exposure could be a problem for banks
Jeremiah Norton (managing member of Chain Bridge Partners), a regulatory advisory firm, warned that regulators may be wary about increased exposure to digital assets.
Norton said that the coin argument was the most perilous and tricky. U.S regulators told banks to “Come to us first if you think about crypto.”
Norton stated that “I don’t see much running room for the algorithmic player in the regulated area anytime soon.”
