The US government has called for the formation of a “responsible innovation” fintech department to spur the growth of emerging technologies including cryptocurrencies, the Blockchain technology and other financial technologies that could enhance existing financial systems.
US regulatory body the Office of the Controller of the Currency (OCC), which previously expressed their optimism towards digital currencies and the Blockchain technology, is planning to launch three offices in Washington, New York and San Francisco led by a chief innovation officer.
The 30th Comptroller of the Currency of the United States, Thomas J. Curry, stated:
“The OCC supports responsible innovation that enhances the safety and soundness of the federal banking system, treats customers fairly and promotes financial inclusion […] we are ensuring that institutions with federal charters have a regulatory framework that is receptive to responsible innovation.”
Effect on Blockchain startups
While it is still difficult to speculate the impact of the OCC’s plans on Bitcoin and alternative cryptocurrencies, it will hugely affect the operations of Blockchain and distributed ledger startups that are collaborating with banks and major financial institutions.
The OCC states that the formation of a responsible innovation department will allow the organization to “identify, understand and respond to financial innovation affecting the federal banking system.”
Thus, Blockchain startups that are developing efficient financial systems and decentralized infrastructure for the American financial industry, will benefit from favorable regulations and workable policies.
More importantly, Curry noted that the primarily purpose of the fintech innovation department is to assist the central bank and other financial institutions based in the US to adopt and embrace emerging financial technologies such as the Blockchain and distributed ledger technologies.
“These changes challenge traditional banking business models. Although banks have a long history of adapting to new technologies and introducing innovative products and services, it is imperative for them to understand the impact of the evolving landscape,” added Curry.
However, the official paper released by the Office of the Controller of the Currency suggests that the innovation department will look closely into the preference of the general population and consumers. It further emphasizes the importance of non-bank financial service providers such as Bitcoin exchanges and service providers, which have demonstrated significant growth over the past few years.
“Technological advances, together with evolving consumer preferences, are reshaping the financial services industry at an accelerated pace. Over the last several years, a large and growing number of nonbank financial technology companies have emerged to provide financial products and services through alternative platforms and delivery channels,” the paper read.