Why Warren and Sanders Object to Crypto Rules

Through Brian P Brooks and Charles W. Calomiris

Aug. 23, 2022 1:14 pm ET

America’s $15 trillion national banking system is overseen by more than 2,000 auditors. Many work full-time in bank buildings to ensure risks to the financial system are identified early. The system is not perfect. It failed to prevent the 2008 financial crisis and other major troubles over the years. During our tenure as head of the Office of the Comptroller of the Currency, we have fined various banks nearly $1 billion for risk management violations. But the US requires banks to submit to the strictest oversight of any industry because it makes the system safer.

That’s why we were so surprised to read Sens’ recent letter. Elizabeth Waren, Bernie Sanders, Dick Durbin and Sheldon Whitehouse Urging our old agency to keep cryptocurrency activities out of the monitored banking system. Crypto is a large and growing sector that will increasingly compete with the traditional banking industry as a vehicle for payments, savings, and credit. With a market cap between $1 trillion and $3 trillion over the past year, the crypto market is non-trivial compared to the banking sector. It offers tremendous opportunities to improve the legacy financial system, but also harbors growing risks that urgently need to be managed.