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Financial Services Law Insights and Observations

Representatives question the OCC’s cryptocurrency and stablecoin efforts

Federal Issues OCC Virtual Currency Fintech Cryptocurrency

Federal Issues

On November 10, six members of the U.S. House of Representatives wrote to Acting Comptroller of the Currency Brian Brooks raising concerns about the OCC’s recent unilateral actions to regulate cryptocurrencies. In the letter, the members question the OCC’s regulatory priorities. For example, the members highlight that, through recent actions, such as its advance notice of proposed rulemaking on digital activities (covered by InfoBytes here), the OCC has sought “to serve those ‘already-banked’ with better payments options” while potentially “overlooking opportunities for assisting the unbanked and underbanked to participate in the economy and the banking system.” Additionally, the members note that the OCC’s interpretive decisions, which authorize financial institutions to hold cryptocurrency and stablecoins for customers (covered by InfoBytes here and here), may have “broad implications for the future of banking” and “are best made in collaboration with your fellow regulators and with Congress to ensure we avoid potential harms to institutional safety and soundness and equity and inclusion.” In closing, the members ask the OCC to answer a number of questions, including (i) whether stablecoin reserves will be segregated from calculating the capital requirements of large banks; (ii) what consumer protections the agency will impose on stablecoin providers; and (iii) whether the OCC has collaborated with other federal regulators on their recent decisions.

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