Former RBI Regulatory Chief Advocates for Crypto Regulations in India

India’s relationship with cryptocurrencies has continued to be murky at best. The situation is made markedly worse by regulators, who have made a habit of being coy on the subject.

However, one former policymaker has called on the Reserve Bank of India to adopt crypto and go deeper into the digital currency age.

Building the Right Environment for Assets to Thrive

Earlier this week, Rama Subramaniam Gandhi, a former governor at the Reserve Bank, spoke at the inaugural Hodl 2021 virtual conference. Gandhi had tried to push the agency into adopting cryptocurrencies and creating an enabling environment for the assets to thrive in India to no avail.

The inaugural Hodl event, which was organized by the Blockchain and Crypto Assets Council of the Internet and Mobile Association of India, included several notable people across India’s crypto industry. They had reps from companies like top exchanges WazirX and CoinDCX, trading service ZebPay, and blockchain developer Polygon. While many of them gave opinions about the potential for blockchain and crypto to improve lives across India, Gandhi’s speech focused more on the regulatory angle.

Gandhi had led the Reserve Bank from 2014 to 2017. As the former policymaker pointed out, cryptocurrencies should be treated in the country as a commodity or an asset – and appropriately taxed. He added that a stable regulatory framework would make it easier for Indians to invest in and hold cryptocurrencies.

“Cryptocurrencies should be paid for through normal payment channels. If they are not, it should be deemed mined, and capital gains tax must be levied. That is like voluntary disclosure.”

Murky Crypto Stance Won’t Affect CBDC Development

India’s stance on crypto has continued to be highly controversial. The Reserve Bank banned commercial banks from transacting with crypto companies in 2018, but the decision was overturned last year following a landmark ruling from the Supreme Court.

But, regulators still weren’t done. Legislation tagged the “ Cryptocurrency and Regulation of Official Digital Currency Bill 2021” was introduced earlier this year to ban crypto, although it hasn’t been signed into law. The Economic Times reported in May that the government might consider overturning the ban to regulate digital asset trading instead. But, not much action has been made in either direction.

Despite the murky stance on crypto, India’s government remains resolute in its mission to build a central bank digital currency (CBDC). Speaking to CNBC recently, Reserve Bank governor Shaktikanta Das explained that CBDC trials could commence before the end of the year.

Das pointed out that the Reserve Bank is very careful in handling a possible digital rupee, even as several other countries worldwide progress with currency digitisation. He explained that the regulatory watchdog is more concerned with examining the CBDC’s impact on the financial sector, especially with affected monetary policy.

On the technical front, the Reserve Bank is also looking into the merits of using blockchain for the proposed CBDC. With all of this, Das expressed confidence in the Reserve Bak’s ability to get a framework ready to start tests by December.

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Author: Jimmy Aki

Bitcoin Hovers at $40k as USD Slides After Fed Says No End to Tapering Anytime Soon

The US central bank has made no decision regarding the timing of the tapering; as such, the market has now shifted its focus on the Jackson Hole conference of central bankers in late August.

After eight straight days of green candles, the longest winning streak in 2021, Bitcoin is comfortably trading around and above $40,000.

The price of BTC is up more than 24% in the past 7-days, 38% YTD, and 268.5% in the past year, the leading cryptocurrency is still green as ever.

The second-largest crypto Ether is also enjoying a $2,300 level, which is up 218% YTD and 632% in the last year. The total crypto market cap is back above $1.6 trillion, as per CoinGecko. ETH 3.66% Ethereum / USD ETHUSD $ 2,384.26
$87.263.66%
Volume 16.32 b Change $87.26 Open $2,384.26 Circulating 116.89 m Market Cap 278.7 b
8 h Altcoins, Not Bitcoin, Drives the Latest ‘Massive’ Surge in Crypto Adoption: Report 9 h Bitcoin Chills Around $40k as USD Slides After Fed Says It Has A Ways to Go Before Tapering Ends; GDP Rises Slightly, Better than Q1 10 h Paypal Reports “Strong Adoption & Trading Of Crypto” In Q2; Currently Working On Allowing Transfers To Third-party Wallets

Spot gold rose 0.8% today to $1,821 an ounce but is still down 4.5% YTD, while the dollar index has been going down since last week, now under the 92 level last seen late last month.

The yield on 10-year Treasuries advanced three basis points to 1.26%, while little was changed with Germany’s 10-year yield at -0.44% with Britain’s 10-year yield advancing one basis point to 0.59%.

This positive action in the risk-on assets has been on the optimism that the Federal Reserve won’t start taping stimulus anytime soon. In Wednesday’s policy meeting, the Fed kept the interest rates in a range near zero while meaning its asset purchase at $120 billion a month.

While the officials have started to discuss how to go about scaling back the bond-buying when the time comes, Fed Chair Jerome Powell has yet again given the market reassurance that there’s still some way to go. It is simply, as expected, boosting sentiment.

“We haven’t made any decisions about the timing,” said Powell, adding they made their first real “deep dive” into discussions about the timing, pace, and composition of future asset purchases during this meeting.

While some US central bank policymakers said they want to end their monthly $40 billion of MBS purchases faster than the $80 billion in Treasuries because of the hot US housing market, Powell doesn’t think so.

“There really is little support for the idea of tapering MBS earlier than Treasuries. I think we will taper them at the same time,” Powell said at a press conference following the central bank’s latest two-day policy meeting.

BlackRock CIO Rick Rieder sees the Fed beginning to outline tapering at Jackson Hole late next month but says more specificity will be given at its September policy-setting meeting.

Powell also said that he is in the process of writing a speech to be delivered at the annual Jackson Hole conference of central bankers on Aug. 26-28.

As for why yields are still falling, Powell attributed that to the technical factor that “you can’t quite explain,” inflation expectation moderating, and decline in real yields as investors get concerned about a slowdown in growth due to the spread of coronavirus’ delta variant.

“We’ve seen long-term yields come down significantly.”

“I don’t think that there’s a real consensus on what explains the moves between the last meeting and this meeting.”

On Thursday, meanwhile, the Commerce Department reported that the US economy rose at a disappointing rate in Q2, with GDP reporting an increase of 6.5% on an annualized basis during the April-to-June period, slightly better than the 6.3% gain in Q1 but well below economists’ forecasts of 8.4%.

Initial claims for unemployment insurance also missed the mark with 400k total above the 380k expectation.

Meanwhile, the US Senate has voted to move ahead with a broad infrastructure package of roughly $1 trillion. This bill includes new tax reporting obligations for crypto to fund a portion of their investment into transportation and power systems.

“Despite the popularity and the need for it, Washington hasn’t been able to get it done. This time, we’re going to get it done,” said Sen. Rob Portman (R., Ohio).

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Author: AnTy

Smart Money Is Becoming Bullish on Ether, Bitcoin, and Cryptocurrencies Again

Over the weekend, cryptocurrency prices further made a recovery, with Ether surging to almost $2,400.

Since last weekend’s drop to $1,720, Ether soared about 40% and is currently trading around $2,270.

Despite this latest increase in price, the funding rate on Ether perpetual contracts is either negative or extremely low at 0.005%. With this, Ether’s price is now lower on the Binance futures market than CME, hence wiping out the arbitrage opportunity for institutional investors.

“Crypto native ETH sept basis (e.g., Binance, Huobi) now lower than CME’s ETH sept basis for first time since CME ETH futures went live. looks like boomers are feeling bullish on crypto (smarter money IMO),” noted trader CL of eGirl Capital.

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Open interest on Ether futures contracts meanwhile is also on the rise along with the price. Total open interest has now gone to $5.57 billion, up from $4.43 billion in late June but still down significantly from the $11.6 billion peak in early May, as per Bybt.

On the leading exchange Binance, OI on Ether futures is 534.16k ETH. In USD terms, it’s $1.21 billion, up from $935.45 million but down from $2.56 billion on May 10. When it comes to Bitcoin, Binance now has 88,000 BTC in OI, while about 11 days back, it was 81.2k BTC, which in itself was an increase from 57k BTC ATH just two days before that.

Amidst all this, the stablecoin market cap has breached $111 billion, making up 7.7% of the total crypto market cap. So far in 2021, stablecoin market cap growth is 3.7x, far outpacing the total YTD crypto market cap growth of 1.9x.

Tether (USDT) remains the dominant stablecoin with almost $62.9 billion outstanding supply, capturing 58.56% market share. USDC, with a $24.3 billion market cap, is not far behind, having a 23.62% market share.

Even algo-stables like TerraUSD, Fei, Liquity, and Frax are showing promising growth, now comprising about 8% of the total stablecoin market cap.

Stablecoins are seeing growth, particularly after the market crash as crypto investors flooded into stables seeking some yield. During the massive sell-off in May, the combined market share of USDC and USDT reached an all-time high of 7% as a percentage of the total crypto market cap, up from a mere 3%.

Ethereum, of course, has the largest piece of the stablecoin pie, with $73.4 billion of the $111 billion outstanding supply issued on its blockchain.

In terms of protocols, in the lending sector, total value locked (TVL) in Aave v2 has $6.73B worth of stablecoins, in DEX space, Curve is capturing $3B in stables, while as a yield aggregator, Yearn has $1.13B of stables on its platform.

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Author: AnTy

Venture Capital Funds Have Already Invested $17 Billion in the Crypto Market This Year

A large portion of this total amount belongs to only one single deal made by Block.one, the company that was behind the cryptocurrency EOS, which raised a record $4 billion in ICO.

Venture capital funds have poured in $17 billion into the cryptocurrency market, so far this year.

According to data provider PitchBook, the amount raised by companies operating in the space is by far the most in any single year and almost equal to the total amount raised in all the previous years combined.

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While the amount raised by Block.one alone makes it the biggest year for venture capital investment in the space on record, the remaining $7.2 billion is also on par with the previous record of $7.4 billion raised in 2018 with six months still to go in the year.

The second biggest haul for this year was hardware wallet Ledger which raised $380 million from investors led by 10T Holdings. BlockFi and Dapper Labs both raised $350 billion and Paxos $300 million. Blockchain.com, Bitso, Figure Technologies, and Forte raised $300 mln, $250 mln, $200 mln, and $185 million, respectively.

“I’m of the opinion that everyone will own crypto, it’s just a matter of what price they get in,” said Ian Rogers, Ledger’s CEO.

Block.one Continues to Raise Money

A large portion of the fund raised belongs to only one single deal. In May, Block.one’s long-time billionaires Peter Thiel, Alan Howard, and Louis Bacon invested $10 billion of cash and crypto assets into a new cryptocurrency exchange Bullish Global. The company raised an additional $300 million in another funding round at the time.

Block.one is the company behind the cryptocurrency EOS, which raised a record $4 billion in an initial coin offering (ICO) between 2017 and 2018.

About a week back, Block.one had a $27.5 million settlement to resolve the class-action lawsuit launched by the Crypto Assets Opportunity Fund regarding the ICO itself.

Trading at $4.27, down 80% from its all-time high made about three years back, EOS is currently a $4.07 billion market cap coin.

Swedish Hedge Fund Not Interested

Meanwhile, a Swedish hedge fund that manages $73 million in assets and returned 41% in 2020, about four times the industry average, won’t touch Bitcoin, because according to the company chief investment officer, they don’t have “accessible fundamentals” to build a model on.

“When there is a crisis, markets generally move toward fundamentals. Not the old fundamentals but new, different fundamentals,” said Patrik Safvenblad, CIO of Volt Capital Management AB, in an interview. So if an asset doesn’t provide that basic parameter, “we stay away from that,” he said.

The issue is also the lack of regulation as Volt would “much prefer to be in a regulated market with regulated trading and Bitcoin is not yet fully regulated,” he said.

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Author: AnTy

Block.one Settles its Class Action Lawsuit for $27.5 Million

Block.one Settles its Class Action Lawsuit for $27.5 Million

Block.one has made a $27.5 million settlement to resolve the class-action lawsuit launched by the Crypto Assets Opportunity Fund.

The lawsuit was related to the company’s token sale that took place between June 2017 and June 2018, in which it raised the biggest ever initial coin offering (ICO) funding of $4 billion and various subsequent matters. The company in a statement said,

“Block.one believes this lawsuit was without merit and filled with numerous inaccuracies. However, accepting this settlement allows us to focus more time and energy on running our business and delivering new products.”

Block.one is the creator of EOSIO and has been behind the cryptocurrency EOS, which has fallen to 26th place in the cryptocurrency market with a market cap of $4.5 billion.

From its all-time high of $2.71 on April 29, 2018, EOS is currently down more than 79%, trading at $4.71, as per CoinGecko.

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Author: AnTy

Bitcoin Overcomes Technical Hurdle; Ethereum Prints 7 Consecutive Green Monthly Candles

Before moving into the weekend, Bitcoin started seeing traction and made its way past $58,500.

As of writing, we are still keeping around $57k on the back of very low funding rates. The highest Bitcoin funding rate is currently 0.0376% on Binance despite the price of Bitcoin increasing by about 11.5% to its highest level since mid-April.

Low funding rate has been the case ever since April 17, when over a million traders were liquidated for $10.1 billion. The funding even further minimized after another $4 billion were liquidated on April 22nd.

The same has been the case for ETH funding rates which are the highest at 0.056% on OKEx, while the price continues to hit a new all-time high — up 44% in the last 8 days to climb to $2,955.07 today and 0.052 BTC on Friday.

With seven straight green months in a row, Ether had its largest-ever monthly close. ETH 0.19% Ethereum / USD ETHUSD $ 2,951.18
$5.610.19%
Volume 28.03 b Change $5.61 Open $2,951.18 Circulating 115.71 m Market Cap 341.49 b
11 h Bitcoin Overcomes Technical Hurdle; Ethereum Prints 7 Consecutive Green Monthly Candles 1 d Binance Smart Chain (BSC) TVL Reaches $45 Billion, Catching Up Fast to Ethereum 2 d “Institutional Money is Moving Toward Ethereum,” says Guggenheim’s Scott Minerd

With funding remaining flat, it means the rally is being led by spot buying, which makes it more sustainable and less prone to get wiped out by a brutal liquidation.

Open interest on Bitcoin futures also has yet to recover as it is currently at $19.8 billion, down from $27.68 billion on April 13. OI on Ethereum futures meanwhile continues to increase, perched on a record $8.5 billion, up from $2 billion at the beginning of this year.

Amidst all the positive action, hedge funds on CME that have been record short on Bitcoin since late last year to earn all the yield have also decreased their short exposure. Overall, the net short position has fallen to early March level.

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The latest price action has helped Bitcoin surpass the technical hurdle of its 50-day average price. According to traders, Bitcoin’s move above $57,000 is a bullish sign for further continuation, but it needs to be seen if it will be able to maintain this level.

Trader SmartContracter sees the current momentum to take bitcoin to $74,000.

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Interest in both Bitcoin and Ethereum continues to grow, especially the second-largest cryptocurrency, which has its big upgrade, London hard fork, with EIP 1559 coming in July. As we reported, Rothschild bought the shares of Grayscale Ethereum Trust for the first time in Q1, and Guggenheim’s CIO shared that money is also flowing into ETH and other credible cryptos.

Assets in Bitcoin products, including ETFs and ETPs, meanwhile have reached a record high of $9 billion at the end of the first quarter, as per ETFGI.

“If you make an investment today or you make an investment in early December like we did, you have to expect multiple 20% to 30% pullbacks in the bull-market phase,” Troy Gayeski of Skybridge Capital said this week on Bloomberg. “But that being said, I mean, the combination of extraordinary supply growth, we still think we’re in the early innings of the adoption cycle.”

Meanwhile, Mike McGlone of Bloomberg continues to see Bitcoin’s diminishing supply combined with the historically low interest rate and a substantial amount of money being pumped into the system to act as catalysts to take it to $100,000.

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Author: AnTy

Tesla has Already Made $1 Billion on its $1.5 Billion Bitcoin Investment

Tesla has Already Made $1 Billion on its $1.5 Billion Bitcoin Investment

Equity analyst Dan Ives expects about 5% of public companies to follow the same route as Tesla until more regulatory clarity comes.

The electric car company has doubled its Bitcoin investments in less than two months.

The leading digital currency made another all-time high at about $58,360 on Sunday, appreciating more than 14x in value since the March 2020 low. These gains helped Bitcoin become a trillion-dollar asset.

This week, however, the market is experiencing a sell-off after a 71.5% uptrend this year.

Bitcoin’s rally, before this recent pullback that went into action over the weekend, has racked up Tesla’s profits worth $1 billion, according to estimates by Dan Ives, an equity analyst at Wedbush Securities. Ives wrote in a note published Saturday,

“Based on our calculations, we estimate that Tesla so far has made roughly $1 billion of profit over the last month from its Bitcoin investment given the skyrocketing price of Bitcoin, which now tops a trillion of market value.”

At the time of the announcement in January, when the BTC price was between $30k to $40k, the company didn’t specify when or at what price it bought Bitcoin. But Tesla is ready to make more from its BTC investment than by selling the cars throughout the last year.

The company “is on a trajectory to make more from its Bitcoin investments than profits from selling its EV cars in all of 2020,” he added.

Tesla, whose CEO is Elon Musk, who repeatedly tweets about Bitcoin and cryptos, also announced at the time of Bitcoin investment that it would soon begin to accept the cryptocurrency as payment for its products.

As the Crypto Twitter (CT) has been calling and hoping, the analyst also expects other companies to follow in Tesla’s footsteps. Ives said in the note,

“While the Bitcoin investment is a sideshow for Tesla, it’s clearly been a good initial investment and a trend we expect could have a ripple impact for other public companies over the next 12 to 18 months.”

However, per him, less than 5% of public companies will take the same route at least until more regulatory clarity comes around.

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Author: AnTy

Bitcoin OTC Indicators Point to Ongoing Institutional Buying And This Means Only One Thing

Bitcoin is holding firmly to its gains made during the wild rally of 4Q20. Trading above $24,000, yes, another all-time high on the weekend, with $4.7 billion in ‘real’ volume, BTC/USD is up 230% this year.

Despite these substantial gains, bitcoin is not looking like it will correct anytime soon. Many are expecting the digital asset to run even higher up before any pullback could be expected.

Similar views are of Ki-Young Ju, CEO of data provider CryptoQuant, and the reason for this continued bullishness is the ongoing institutional buying.

“This BTC bull-run never stops as long as these OTC indicators keep saying institutional-buying,” said Ju pointing to all the large over-the-desk deals still going on vigorously.

For starters, massive outflows can be seen in Coinbase BTC outflows going to their new cold wallet for custody that held 6k to 8k BTC. Whenever the US’s biggest exchange moves a significant amount of Bitcoins to other cold wallets, it indicates OTC deals.

The largest digital asset manager, Grayscale, which continues to add up BTC to its stash, uses Genesis Trading for buying Bitcoin, which in turn uses Coinbase OTC desks for that. Coinbase was the one that helped MicroStrategy in its initial $250 million investment. Ruffer also confirmed that they purchased their BTC via Coinbase.

Another indicator is the Fund Flow Ratio for all exchanges, the ratio of network transaction volume of exchanges among all the tokens transferred on the network. If this value goes up, it implies most of the network transactions are exchange deposits/withdrawals; otherwise, transaction volumes are coming from non-exchange wallets. Young Ju noted,

“Since the price is eventually determined on exchanges, massive non-exchange transaction volume is considered as a bullish signal. These transactions include OTC deals.”

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Currently, only 5% of the network transactions are used for exchange deposits and withdrawals. The same level was seen in February 2019 when major exchanges launched OTC desks.

Looking at Tokens Transferred, which is the number of Bitcoins transferred on the network, this indicator has been trading up ever since early August.

If the value of Token Transferred goes up and the fund flow ratio for all cryptocurrency exchanges goes down, it again “implies that huge OTC deals are ongoing.”

Based on these on-chain indicators that estimate OTC deals going under the hood by institutional investors, large OTC deals are happening, and they point out that “institutions are continuing to buy BTC.”

So, much like this week, which saw several levels and all-time highs getting breached, we could continue further up.

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Author: AnTy

SEC Commissioner Urges to ‘Embrace’ the Personal Financial Liberty as Crypto & DeFi Gains Adoption

Commissioner Hester M. Peirce of the U.S. Securities and Exchange Commission (SEC) made new remarks on Thursday urging regulators to honor the right to financial freedom.

Talking about the digital assets sector, Peirce, who is known as ‘Crypto Mom’ in the industry, said crypto-regulation is one area where “intersection between personal liberty and regulation looms large.”

She noted the new challenges posed by crypto because they are rooted in a key principle of people’s fundamental right to engage with one another without a trusted third party. At the same time, regulators are used to dealing with intermediaries “because they are easy to grab hold of and regulate.”

Peirce discusses how these challenges are growing as crypto evolves while the SEC struggles with the issues with their regulatory nature.

Now with the explosion of decentralized finance, they “will pose thorny questions and decisions for us in the coming years.”

Reembrace national passion for personal freedom

Peirce remains an advocate for the crypto industry. Once again, she wants regulators to “figure out a way to embrace the personal liberty principles undergirding it,” especially now that crypto is gaining adoption outside and inside the legacy financial system. She said in her speech,

“If we were instead to steamroll the technology’s liberty-enhancing features under the weight of regulation, we would lose a lot of the power of the new technology to afford opportunities to people whose autonomy has previously been curbed by.”

According to her, regulators are using climate policy as a disguise as it “does not raise the same kind of fears that other types of central planning would.” Peirce said,

“The decentralization of crypto is the opposite of central planning, which is making something of a comeback, with financial regulation as one of its primary tools. After an unsuccessful history, people would reject central planning out of hand unless it came in a disguise. The disguise of the day is climate policy.”

Directing these efforts through financial regulation will only make the capital markets less effective and more brittle at serving all sectors of the economy.

The crypto-friendly SEC commissioner also touched upon the accredited investors, which requires a person to be wealthy or have a high income. Although the accredited investor category has been expanded slightly, Peirce added,

“the presumption that people need to entreat a regulator for permission to invest still offends principles of personal liberty, which allow people both to earn and spend money as they see fit.”

Today’s “well-intentioned regulations” are very much in tension with personal liberty, and Peirce wants the regulators to “reembrace our national passion” for individual freedom.

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Author: AnTy

Former Coinbase Exec Nominated by President Trump to Lead US Comptroller of the Currency

President Trump has made several nominations, amongst them being that of the Office of the Comptroller of Currency (OCC), where former Coinbase Chief Legal Officer Brian Brooks is currently at the helm acting capacity. He has now been nominated to serve in a permanent position for the next five years, should the lame-duck senate approve his appointment.

Brooks assumed his acting role at the OCC in May after Joseph Otting resigned from the position, prompting Treasury Secretary Steven Mnuchin to replace him. Before this, he had served as Coinbase’s general counsel, a background that made stakeholders optimistic of a more crypto-friendly OCC. Unsurprisingly, Brooks has introduced significant changes in line with Fintech and crypto services.

One of his office’s most popular moves was the announcement that regulated U.S banks could offer crypto custodial services. Since then, U.S banks have loosened their gun-shy approach towards crypto with some launching services in this niche. The OCC also announced in September that these financial institutions could further extend their services to stablecoin providers.

In a recent Forbes interview, the acting OCC head elaborated some options that payment companies, including crypto, can pursue to receive a federal bank charter. Per the breakdown by Brooks, firms can acquire this charter by applying for a non-depository bank charter, National Trust Bank Charter, or buying a depository institution.

Confirmation Still Uncertain

With the U.S elections just recently concluded, the Brooks appointment by outgoing President Trump could face some challenges if the senate does not act before Jan 20. This is when President-elect Joe Biden is expected to assume office, which means he could nominate another person for the position.

Notably, Brooks has faced a backlash from the Democrats in the past, especially with handling the COVID-19 pandemic. His appointment will first go through the U.S banking senate committee, which will hold a confirmation hearing before a decision is voted in the senate.

Meanwhile, Brooks has already welcomed the nomination by President Trump, noting that he will continue to advance the mission of the OCC if confirmed,

“As Acting Comptroller of the Currency, I am proud to contribute to this 157-year-old mission.

If confirmed, I will work ceaselessly to ensure the agency continues to fulfill its critical mission and the men and women of this agency have the resources, training, and leadership they need to succeed in their duties.”

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Author: Edwin Munyui