As published on news.bitcoin.com, Friday 21 August, 2020.
Brian Brooks, the acting comptroller of currency at the U.S. Office of Comptroller of Currency (OCC), says America must adopt digital currency payment rails if the country hopes to compete with global payment rails in the future. He insists changing consumer needs must be prioritized over the interests of powerful banks that may be against the rise of cryptocurrencies.
Speaking in an interview, the former chief legal officer at Coinbase Global, said it is a fact that “50 million Americans own digital currency and we cannot ignore that.”
Brooks says part of “the reason why payments activity has moved outside the banking system is because consumers now want to receive their services in a different way.”
Consumers of financial products want fast and error-free services and this means the United States needs to “get to a place where payments can be transmitted virtually instantaneously and where errors can be eliminated.”
Under Brooks’ leadership, the OCC has already issued a banking license to a fintech company Varo Money. The watchdog has also given the green light for banks to start offering crypto custody services.
Despite granting banks the opportunity to participate in crypto-related services, Brooks still thinks banking systems are outdated and not suitable for today’s changing environment.
He explains how the American economy shut down laid bare this fact:
“When the lockdown started, Americans relied on banks to process and send stimulus checks and payments, yet for many people it took days, sometimes weeks before they received their payments.”
According to U.S. media reports, many Americans experienced delays in getting their “economic impact payments” due to issues like changed addresses or closed bank accounts.
Identifying the source of this challenge, Brooks said, “the problem is we were sending those (payments) across using 19th-century banking rails.” Before the rise of new technologies, “all payments happened through the banking system.”
New technologies have changed the way consumers buy or pay for goods, but as Brooks underscores, “banks are sort of the last bastion of the amalgamated comprehensive supermarket of financial services.” He anticipates continuing resistance by banks to new payments rails.
Still, Brooks reiterates his conviction that “there is nothing more powerful than markets because they represent what millions of consumers want every day.” Therefore, “my job is not to build new payment rails but to identify and solve impediments that make it hard for people to get what they want and need.”
The OCC leader remains mindful of how he might be perceived in banking circles given his background. Nevertheless, Brooks reassures players in the banking sector of his mandate as leader of OCC:
"I am not a crypto bull or bear but I recognise reality, a lot of people have this stuff (cryptocurrencies) and they have it for good reasons. We need to make sure its a success to them in the same safe and sound way they get a check into their account. Our role is to innovate as people change the way they consume financial services."
Brooks also wants banks to innovate so that they can keep up with the changing market.