OCC Crypto Guidance Used to Assure National Banks as Certain States Move Aggressively into Digital Assets

Earlier this week, the Office of the Comptroller of the Currency (OCC) – the leading national bank regulator, provided guidance on banks and stablecoins. The guidance was designed to provide “greater regulatory certainty for banks” operating in this sector.

Stablecoins are digital assets typically tied to a single asset such as the US dollar. Stablecoins may be used as a streamlined on/off-ramp for crypto traders/investors.

The OCC under the direction of Acting Comptroller Brian Brooks has been out front in several regulatory questions regarding Fintech. The guidance on digital assets was the most recent statement designed to clarify emerging innovations in financial services.

Crowdfund Insider received a comment from Paul Clark, Partner at Seward & Kissel LLP, stating there was little in the guidance that would have surprised federally chartered banks:

“The OCC’s guidance that national banks can hold funds on deposit as collateral for a stablecoin does not contain anything that would have surprised national banks. Banks do this every day,” said Clark. “For example, banks hold deposits as collateral for securities lending programs offered by brokers.  In that case, it is the broker that is obligated to keep the correct amount of funds on deposit so that there is a one to one ratio of the dollar value of the borrowed securities to the amount on deposit. The bank simply holds the funds and has no liability if the broker has not calculated the amount correctly.”

Clark emphasized that no new law was created by the OCC announcement but it appeared that the regulator wanted to leverage the guidance process to “assure national banks that they can use their established powers in the crypto context just like they have in other areas.” Clark pointed to Wyoming, a state that has emerged as a jurisdiction of preference for digital asset firms. In fact, Kraken was just approved to operate a digital asset bank or first “Special Purpose Depository Institution” (SPDI).

“They want to be out front on the crypto issues so national banks do not appear to be behind state-chartered banks, particularly in light of the aggressive moves by Wyoming; and the OCC may also highlight the advantages a national bank charter can provide as opposed to more limited state charters such as Wyoming’s SPDI charter,” stated Clark.

So is the state-chartered vs national charter good for competition in the digital asset sector? Perhaps. But most industry participants probably want regulatory clarity across the country regarding digital asset innovation – including digital assets that are securities or maybe something else.

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