OCC lead crypto innovation
Cryptocurrencies,  Regulation

Senate banking chair: U.S. should lead in crypto innovations

Sen. Mike Crapo took note of former Coinbase lawyer Brian Brooks’ activity at the Office of the Comptroller of the Currency in moving to create “clear rules of the road” for the crypto industry

The U.S. should take the lead in developing a robust cryptocurrency ecosystem, Senate Banking Committee Chairman Mike Crapo (R-ID) said in a Sept. 1 letter to Brian Brooks, acting chief of the Treasury Department’s Office of the Comptroller of the Currency.

Brooks, who left his position as chief legal officer of cryptocurrency exchange Coinbase to take up the reins at the OCC, has been active in helping the industry make nice with banks that have long avoided it. 

Notably, in July, the OCC published a letter making clear that the banks and federal savings associations it charters, regulates and supervises are allowed to provide custody services for cryptocurrency.

Crapo said that in light of that, it would be “prudent to provide similar clarity for payments.”

The cryptocurrency industry is “as diverse in its products and functions as the rest of financial services,” he said, adding, “[t]he U.S. should develop clear rules of the road that protect businesses and consumers without stifling future innovation.”

Those innovations, said Crapo, are “inevitable and beneficial,” and the U.S. should be a leader in developing them.

Taking the lead

The Banking Committee “has held hearings on cryptocurrencies and digitalization in the payments system, including the impact of distributed ledger technology, blockchain and stablecoins,” Crapo said. 

Noting that the OCC under Brooks has “taken the lead” in seeking input from banks on “a variety of areas important to financial technology (fintech) and digital currency issuers,” Crapo asked Brooks to provide an update on what are the next steps OCC plans to take.

Specifically, Crapo asked the OCC for an update on what it has heard in four areas from banks in the wake of a June 4 Advanced Notice of Proposed Rulemaking.

These are: 

  • What activities related to cryptocurrencies or cryptoassets are financial services companies or bank customers engaged in and what are the barriers or obstacles to further adoption of crypto-related activities in the banking industry?
  • How is distributed ledger technology used or potentially used in activities related to banking?
  • What new payments technologies and processes should the OCC be aware of and what are the potential implications of these technologies and processes for the banking industry?
  • What new or innovative tools do financial services companies use to comply with regulations and supervisory expectations (i.e., “regtech”)?

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Ted Knutson is a veteran Washington financial reporter. Knutson does not own any cryptocurrencies.