Crypto ‘Scary but Necessary’: Former OCC Head Brooks

By Jeff Benson

Brian Brooks, who resigned as Acting Comptroller of the Currency last week, has called cryptocurrency, including decentralized finance (DeFi) and stablecoins, “necessary” in order for the US to “continue to lead and succeed” in the world.

Brooks, a former Chief Legal Officer at prominent US cryptocurrency exchange Coinbase, helmed the Office of the Comptroller of the Currency (OCC) from May 2020. While there, he gained a reputation for embracing financial innovation and opening doors for the cryptocurrency industry. The OCC is an office of the US Treasury that regulates national banks and credit unions.

On Tuesday, Brooks tweeted, “I’m incredibly optimistic that our big, brawling, risk-taking, dynamic country will continue to lead and succeed—but not by protecting powerful incumbents. Success will come from disruptive ideas that are scary today but expected and even necessary tomorrow.”

He then listed cryptocurrency, stablecoins, and decentralized finance—blockchain-based protocols that replace the functions of traditional banks, including lending and interest—as examples of innovations that are “scary to some today but necessary tomorrow.” 

Crypto fits the bill in his eyes because it theoretically protects against an expansionist monetary policy in which the Federal Reserve pumps more money into the economy. Some worry such a policy will debase the currency. Bitcoin, by having a hard cap of 21 million BTC, is designed to be non-inflationary (though not all cryptocurrencies have a supply cap). 

DeFi is necessary so that people aren’t beholden to banks that may impose spending limits or void purchases at objectionable-but-legal businesses. And stablecoins, he said, can help the US dollar maintain its role as a medium of exchange across the world.

Brooks hasn’t just talked about crypto. Toward the end of his tenure, the Treasury office issued guidance that OCC-regulated banks could utilize blockchains and stablecoins for payment activities and even issue stablecoins themselves. 

However, the former Coinbase executive was equally praised and panned for his work, all of which took place amid the COVID-19 pandemic. Last year, several Democratic lawmakers objected to his focus on cryptocurrency at a time when Americans were struggling to access stimulus payments and government loans.

Though outgoing President Trump nominated Brooks for a five-year term as OCC chief in November, the chances for his nomination to go through took a hit after Democrats won both Senate runoffs in Georgia, thereby shifting control of the upper house. Current Senate Banking Committee Chairman Mike Crapo had previously indicated that the committee would take up his nomination.

Blake Paulson is currently serving as the Acting Comptroller of the Currency until President-elect Joe Biden nominates a replacement.

Recommended News