As per a particular opinion piece included in this Tuesday edition of Financial Times, standing US Comptroller of the Currency Brian Brooks claims that DeFi has the potential to create self-sufficient and driving banks. He emphasized that the industry is on the cusp of the algorithm age, and thus, banking regulations must be reshaped in order to fit in. Brooks then argued that regulators would most likely find it more comfortable to work with algorithms rather than actual bankers.
The current OCC chief then compared the present banking regulations to traffic laws, further stating that DeFi is on the verge of creating self-driving banks, much like how the automotive industry is to self-driving cars. Brooks supplements this analogy by saying that the current banking rules primarily exist to prevent human errors and failings, just as traffic regulations and laws are specifically made to protect drivers.
If that is indeed the case, how about the people who are presently working at banks – what would become of them? As a direct answer to this question, Brooks states that he – as the head of the OCC – has several regulations in mind for bankers now that unmanned banks are closer than ever to reality. That being said, he also noted that federal agencies must already come up with a brand new set of protections as there will be several significant risks if the federal regulatory remains unclear.
Brooks notes that we don’t have to wait for the US states to start buckling the order and uniform development of a national market with inconsistent rules in the effort to fill up regulatory holes and the absence of laws. According to Brooks, regulations must be established from the very top itself.