Tokenization is an important step forward, but not possible on public blockchains: Acting Commissioner of the U.S. Currency Authority | CoinDesk JAPAN | CoinDesk Japan

Michael Hsu, Acting Commissioner of the Office of the Comptroller of the Currency (OCC) and known crypto skeptic, said that while tokenizing assets is an important step toward the future of finance, decentralization We believe that mold blockchains may be too problematic to handle this move.

Achieving decentralization, security and scaling all at once is “impossible on a public blockchain,” Xu said at the American Bankers Association event on June 16.

“So the crypto industry remains largely self-referential and disconnected from the real world,” he said, noting that the industry has “been in the mainstream spotlight for several years, attracting billions of dollars of venture capital investment. We are immature and risky despite millions of hours of development.”

The OCC and other U.S. banking regulators have warned that involvement in cryptocurrencies will require strict scrutiny, but many financial institutions, including major banks, are experimenting with blockchain projects.

Such a “centrally-operated and trusted blockchain has the potential to provide security and scale efficiently,” Xu said. He also added that tokenization “doesn’t have to be decentralized or trustless.”

“Tokenization could theoretically bring together instructions, transactions, and payments into a single step, removing friction—but the assumption, of course, is that such technologies would interoperate with fiat currencies and real-world payment systems. “It is possible” and “It is necessary to develop a legal basis for tokenization.”

｜Translation: coindesk JAPAN
｜Editing: Takayuki Masuda
| Image: Acting Commissioner of the U.S. Office of the Comptroller of the Currency, Michael Xu (CoinDesk)
｜Original: US Banking Watchdog Makes Case for Tokenization, Just Not on Public Blockchains