The US Office of the Comptroller of the Currency (OCC) is about to take another step in helping local banks to deal with the Cryptoworld. Brian Brooks, Acting Head of the OCC, confirmed that they hope to clarify whether cryptocurrencies, in particular privacy tokens, such as monero (XMR), zcash (ZEC), are permissible assets for banks to hold, trade or lend.
However, speaking to the Wall Street Journal, he did not specify any further when this clarification might be announced. The OCC declined to comment when contacted by Our. Meanwhile, according to the report, the Office is also looking to determine whether banks can underlie blockchains as payment networks.
“In the early days, because of status-quo bias, people tend to focus on the most conservative, overly restrictive interpretation of the risks in ways that delay adoption of something that later turns out to be like the greatest thing that ever happened,” Brooks, Coinbase’s former general counsel, was quoted as saying in the report.
“And what we’re trying to do is to not make that mistake this time. We’re trying to call balls and strikes. And be careful about the legal risks while unleashing the power of the technology.”
In September, international law firm Perkins Coie said that regulated financial institutions can ensure compliance with anti-money laundering obligations when supporting privacy tokens.
Meanwhile, the latest development comes in line with long-term efforts by pro-crypto lobby groups in the US as, this past July, Coin Center, one of the cryptosphere’s largest lobbies in America, asked OCC to enable banks to get immersed in crypto-based finance and accept privacy coins.
The advocacy group was encouraged by the OCC’s interpretative letter from July 22, 2020 in which the office said that crypto technology was an important innovation in financial technology. Back then, the OCC allowed all federally chartered banks in the US to provide cryptoasset custody services to their customers, prompting mixed reactions among Bitcoiners.
Also, in September, the OCC said that US banks can provide “services in support of a stablecoin project,” which may include holding stablecoin reserves, as long as the bank has “instituted appropriate controls and conducted sufficient due diligence” and in situations where the coins are held in “hosted wallets.”
The US banking industry is awaiting the new OCC’s guidelines. This past August, the American Bankers Association asked the OCC for help in addressing banks’ concerns through clarifying anti-money laundering compliance expectations that relate to crypto, as well as cooperating with other regulators to ensure they issue consistent regulations.
The OCC supervises close to 1,200 US banks, federal savings associations, and federal branches and agencies of foreign banks that conduct as much as 70% of all banking business in the US.
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