Stablecoins Need a Common Standard Says Banking Watchman

Michael Hsu, acting chief of the Office of the Comptroller of the Currency (OCC) calls for a technical standard that all stablecoins should abide by in order to keep stablecoins open and inclusive, in his latest statement. 

Hsu drew reference from the establishment of the internet through standards that promoted inclusivity and responsible innovation. 

“The technical foundations of the internet provide for an open, royalty-free network – something we take for granted today,” Hsu said.  “Those foundations did not emerge on their own. They were developed by standard setting bodies like IETF (Internet Engineering Task Force) and W3C (World Wide Web Consortium), which had representatives with differing perspectives, a shared public interest ethos, and a strong leader committed to the vision of an open and inclusive internet.”

He believes that a similar set of standards should apply to stablecoins with representation from crypto/web3 firms, academic institutions and the government. 

He noted the OCC is willing to work with other government offices to support this effort, acknowledging “stablecoins lack shared standards and are not interoperable.” His statement came after his appearance at the Artificial Intelligence and the Economy: Charting a Path for Responsible and Inclusive AI symposium in Washington D.C. 

The OCC and other U.S. financial agencies have already begun talks in determining an approach to overseeing stablecoins, after the President's Working Group on Financial Markets report urged lawmakers to subject stablecoin issuers to the same strict federal oversight as banks. 

Hsu is also a member of the Financial Stability Oversight Council, which has recently studied how to treat stablecoins in the wider U.S. financial system. Prior to joining the OCC, Hsu served as an Associate Director in the Division of Supervision and Regulation at the Federal Reserve Board of Governors.

Author: Tyler Irvin

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