U.S President, Joe Biden, is reportedly moving forward with plans to nominate Cornell Professor, Saule Omarova, as the Office of the Comptroller of the Currency (OCC). The Biden administration was first rumoured to be considering Omarova last month but the news of Biden’s intentions was reported by Bloomberg on Wednesday.
Omarova has been known to openly criticise cryptocurrencies, as well as the existing U.S bank structure, in recent years. The Cornell professor has advocated for having the U.S central bank provide consumer banking services, rather than the private banks that already exist.
In 2019, Omarova contributed to a paper titled New Tech v. New deal: Fintech as a Systematic Phenomenon. In the paper, she wrote that fintech (including cryptocurrencies) is changing the face of financial transactions and services in the U.S. She took a critical tone to the idea that crypto or fintech could revolutionise the provision of financial services.
Omarova wrote, “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. 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, Omarova will be the first full-term controller since her predecessor Joseph Otting. Otting led the OCC between 2017 and 2020, he was replaced by Brian Brooks last year. During his leadership, Brooks oversaw 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.
After Brooks came Michael Hsu, who agreed that cryptocurrencies are innovative but warned that the industry must take a more realistic stance about what it is doing and how. On Tuesday, Hsu made a presentation to the Blockchain Association in which he said, “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,” adding “I strongly support the goal of increasing financial inclusion.”
Saule Omarova is significantly more critical of cryptocurrencies than any of the previous OCC leaders. Omarova has said that she wants to “end banking as we know it”. Many question whether the Biden administration would allow Omarova to make the changes that she has proposed, which includes moving consumer banking to the Federal Reserve from private institutions.
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