Biden to Nominate Crypto Critic as Top Bank Regulator: Report

Cornell University Professor Saule Omarova has criticized cryptocurrencies in the past.

Sep 22, 2021 at 11:30 p.m. UTC
Updated Sep 23, 2021 at 3:51 p.m. UTC

U.S. President Joe Biden is reportedly moving forward with the nomination of a crypto critic to run a federal bank regulatory agency.

The Biden administration intends to nominate Cornell University Professor Saule Omarova to be the next Comptroller of the Currency (OCC), Bloomberg reported on Wednesday. The administration was first rumored to be vetting Omarova last month.

An OCC spokesperson declined to comment.

Omarova has criticized the existing bank structure and cryptocurrencies in recent years, according to the Bloomberg report. She has advocated for having the U.S. central bank, rather than private banks, provide consumer banking services.

In a 2019 paper, “New Tech v. New Deal: Fintech as a Systemic Phenomenon,” Omarova wrote that fintech, including cryptocurrencies, is changing how financial transactions and services in the U.S. operate, but she was critical of the idea that cryptocurrencies or fintech at large may “‘revolutionize’ the provision of financial services.”

“Bitcoin’s amazing journey from an obscure techno-utopian experiment to Goldman Sachs’ market-making books and institutional investors’ portfolios is also fascinating in a deeper sense,” she wrote. “It provides a vivid example of how fintech technology can be, and is used to synthesize tradable financial assets effectively out of thin air.”

If nominated and confirmed, Omarova will be the first full-term Comptroller since Joseph Otting, who headed the federal banking regulator between 2017 and 2020. Former Acting Comptroller Brian Brooks took over the agency last year, overseeing a handful of guidance letters and conditional approvals allowing crypto companies to have greater access to banking services and letting banks interact more closely with cryptocurrencies.

Since May, the regulatory agency has been run by Michael Hsu, who called cryptocurrencies innovative but warned the industry has to be more realistic about what it is doing and how.

“Those in traditional finance may laugh at this. But crypto/DeFi is able to pose a threat to the status quo because many people feel ignored, taken for granted, or exploited by banks,” Hsu said in a presentation with the Blockchain Association on Tuesday, referring to decentralized finance.

He advised crypto companies to present both the potential benefits and the drawbacks to different projects in the sector, likening crypto to “fool’s gold” due to the number of scams and fraudulent projects in the space.

“I strongly support the goal of increasing financial inclusion,” he said. “It is difficult to see how the current set of activities is achieving that goal however. How is crypto … making it less expensive to be poor? How is it helping to expand access to these banking services?”

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