Industry Calls on US Regulator to Open Floodgates on Banks’ Crypto Capabilities
In response to a request for comment on potential rules from the Office of the Comptroller of the Currency (OCC), many major players in crypto have written in, asking the regulator to expand the authorizations it gives banks to handle cryptocurrencies and use blockchain technology.
Blockchain-backed transfers and new stablecoins as dollar competitors
One of the leaders in blockchain-backed financial services, Silvergate Bank wrote to the OCC to promote blockchain as a more efficient way for banks to send money to each other and between client accounts. Silvergate pointed to USD-backed stablecoins like USDC or USDT as examples of how much quicker this system could be:
“Blockchain technology delivers a recognized use case as a transfer of value network, and while many continue to explore how to expand upon that use case, as demonstrated by various USD backed stablecoin projects, they are doing so within existing regulatory frameworks that do not provide adequate guidance for regulated entities, like financial institutions.”
Crypto lobbying group the Blockchain Association similarly applauded the example of stablecoin projects, making a central part of its commentary that the OCC “Allow banks to settle payments and accept deposits in dollar stablecoins that meet criteria defined by the OCC.”
Coin Center, a think tank and lobbying group promoting decentralized network, went a step further in its response to the OCC, advocating for banks to support controversial privacy technologies like:
“(1) trustless transaction mixing technologies like CoinJoin for Bitcoin transactions, and (2) privacy enhanced cryptocurrency networks like Zcash and Monero.”
The OCC and new vision for banks
As the Blockchain Association pointed out, even well-intentioned and compliant crypto companies operating in the U.S. have been unfairly locked out of basic financial services. That ends up hurting users: “The lack of access of cryptocurrency business to safe and sound financial services ultimately creates unnecessary risks for U.S. consumers.”
In the OCC’s request, the office emphasized the flexibility of banking, saying “the Federal banking system is well acquainted with and well positioned for change, which has been a hallmark of this system since its inception.”
The OCC is the office of the U.S. Treasury responsible for regulating the country’s federally chartered banks. Since Brian Brooks took over as acting head of the office, it has seen radically accelerated crypto interest. Two weeks ago, the OCC finally authorized banks to custody crypto assets. Since then, Brooks has continued to express interest in blockchain as a way of modernizing payments in the U.S.