The Trump cryptocurrency push got a major regulatory green light earlier this month.
Grygo is the chief content officer for FTF & FTF News.
The Trump cryptocurrency push got a major regulatory green light earlier this month when the Office of the Comptroller of the Currency (OCC) reaffirmed that “a range of cryptocurrency activities are permissible in the federal banking system.”
OCC officials published Interpretive Letter 1183 “to confirm that crypto-asset custody, certain stablecoin activities, and participation in independent node verification networks such as distributed ledger are permissible for national banks and federal savings associations.” The letter officially ends the requirement for “OCC-supervised institutions to receive supervisory nonobjection and demonstrate that they have adequate controls in place before they can engage in these cryptocurrency activities.”
Instead of the new requirement, OCC officials want banks “to have the same strong risk management controls in place to support novel bank activities as they do for traditional ones,” says Rodney E. Hood, acting comptroller of the currency, in a prepared statement.
The OCC action is intended to ease “the burden on banks to engage in crypto-related activities and ensure that these bank activities are treated consistently by the OCC, regardless of the underlying technology. I will continue to work diligently to ensure regulations are effective and not excessive while maintaining a strong federal banking system,” adds Hood, who was appointed to his post last month by the U.S. Department of the Treasury.
To provide further clarification, the OCC “will examine the activities described in Interpretive Letters 1170, 1172, and 1174 as part of its ongoing supervisory process,” officials say.
The letters attempt to provide crypto clarity for U.S. banks:
- OCC Interpretive Letter 1170 (July 22, 2020): Addressed “whether banks may provide crypto-asset custody services;”
- OCC Interpretive Letter 1172 (September 21, 2020): Focused on “whether banks may hold dollar deposits serving as reserves backing stablecoins in certain circumstances;” and
- OCC Interpretive Letter 1174 (January 4, 2021): Dealt with “whether banks may (1) act as nodes on an independent node verification network (i.e., a distributed ledger) to verify customer payments and (2) engage in certain stablecoin activities to facilitate payment transactions on a distributed ledger.”
“The OCC will examine the activities described in Interpretive Letters 1170, 1172, and 1174 as part of its ongoing supervisory process,” according to Letter 1183. “As with any activity, banks must conduct all crypto-asset activities in a safe, sound, and fair manner and in compliance with applicable law. New activities should be developed and implemented consistent with sound risk management practices and align with banks’ overall business plans and strategies.”
More clarity would be greatly appreciated given the recent volatility in the traditional capital markets and the crypto world.
More about the OCC announcement can be found here: https://shorturl.at/PSy1Z
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