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The Economics of Foreign Exchange

The head of the US currency regulator predicts an influx of DeFi-banks
CONTENT
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Banks on blockchain solve long-standing problems of the financial market
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New technology has risks
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Self-driving banks are likely to come before self-driving cars
International consortium of news organizations developing transparency standards.
Self-governing blockchain-based banks will appear before self-driving cars learn to fly, says the head of the American regulator
The Decentralized Finance Market (DeFi) Decentralized Finance (DeFi) is a blockchain-based financial service that offers users access to an open, efficient and … More) banking sector. This opinion was expressed in the author’s column of the Financial Times by Brian Brooks, head of the Office of the Comptroller of the Currency (OCC).

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According to Brooks, self-governing DeFi banks will solve a range of problems ingrained in the traditional banking hierarchy. For example, self-governing banks will add variety to the range of interest rates offered and eliminate discrimination against a particular type of borrower..
“They [self-governing banks] can even eliminate the risk of fraud or corruption if they are no longer operated by humans at all,” Brooks writes..
Despite their newness, self-governing banks are likely to “go mainstream before self-driving cars can fly,” says OCC chief.
Risks of innovation
Brooks acknowledges that along with the potential benefits of self-governing banks, new risks are emerging. Accelerating foreign exchange with blockchain technology can increase liquidity risk compared to traditional financial institutions.
Lack of clarity in the federal legislation of the US states can hinder the development of the national market for DeFi banks. This has already happened with self-driving cars, Brooks says..
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However, so far there is no need to talk about the emergence of self-governing banks in the United States, since some legislators are still skeptical about the digital economy..
Despite the fact that the OCC has allowed banks in the United States to conduct payments in stablecoins, the Treasury Department insists on full verification of users of cryptocurrency wallets. The situation is complicated by the fact that, according to some experts, the new head of the US Treasury will continue the aggressive policy of his predecessors against the cryptocurrency market..
Meanwhile, in the domestic market, digitalization is in full swing. The editorial staff of BeInCrypto wrote that Sberbank and VTB intend to increase the issue of cards in the next two to three years, 50% of which will be digital. VTB plans to expand digitalization to 40% of cards. Now the share of digital cards in VTB accounts for only 5% of the issue, bank representatives noted.
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