- “Self-driving banks” based on blockchain technology and DeFi are coming, the outgoing US currency comptroller has said
- Brian Brooks has warned that regulators need to be ahead of the game on self-driving banks
- Brooks says decentralized finance could “stop discriminaion”
Brian Brooks, the US acting comptroller of the currency, has said that “self-driving banks” based on the principles of DeFi and blockchain technology will come quicker than regulators can prepare for them. Brooks, writing in the Financial Times yesterday, said that such banks could eliminate fraud and corruption but warned that this lack of regulation could leave users exposed to liquidity risk and asset volatility while being at the mercy of a computer algorithm rather than a human being making decisions.
Self-driving Banks Could Face “Patchwork of Inconsistent Rules”
Brooks, who also announced yesterday that he is standing down from his role this week, used the pages of the Financial Times to offer his opinion that banking is “headed down the same road” as the lack of cohesive laws surrounding self-driving cars, hence the term ‘self-driving banks’.
Brooks says that self-driving cars arrived quicker than lawmakers were prepared for, which has left a “patchwork of inconsistent rules” around the country and worries that the same could hold true for DeFi banks. This is despite his suggestion that regulating self-driving banks “may be easier than supervising banks today”.
Brooks One of Few Forward Thinkers
Brooks says he sees himself as an “optimist” who feels that self-driving banks and the technology behind them can “usher in a future where we eliminate error, stop discrimination, and achieve universal access for all”. Such visionary thinking is rare in the upper echelons of government, and it is unfortunate that Brooks won’t be able to drive any policies regarding self-driving banks for the foreseeable future – not long after the article was published it was revealed that Brooks announced is leaving his role in order for president elect Joe Biden to make his own appointment.