Major U.S. banks might be willing to support cryptocurrency services – with just a bit of additional guidance from the Office of the Comptroller of the Currency (OCC), their federal regulator.
Multiple national banks responded to the OCC’s June “Advance Notice of Proposed Rulemaking” (ANPR), which asked the general public to weigh in before Aug. 3. on how cryptocurrencies and other fintech tools might be used in the financial sector. Notably, several banks, including U.S. Bank and PNC, indicated they might be interested in actually providing crypto custody and other services to customers.
The responses by just under a dozen banks, among a total of 89 submissions from think tanks, policy advocates, crypto startups and other entities, represent one of the strongest signs yet that traditional financial institutions view the still-nascent crypto space as a legitimate asset class.
The responses contrast sharply with an open letter sent to Acting Comptroller of the Currency Brian Brooks. The letter, which opposed a narrow payments charter for fintech companies, was signed by many of the same respondents and sent to the OCC on July 29.
Fresh guidance from the OCC may help provide the necessary legal comfort for banks to provide crypto-native analogs to traditional bank services, wrote Juan Saurez, Coinbase’s vice president and general counsel for enterprise.
“Although these services, such as borrowing, lending and remittances, are permissible activities for national banks, there remains some uncertainty as to whether the provision of these services using cryptocurrencies is authorized,” he said.
Peter Najarian, chief revenue officer at BitGo, told CoinDesk the ANPR’s very existence is exciting, as it’s “a frankly inevitable step in the maturing of this ecosystem.”
Ongoing dialogue
Kristin Boggiano, founder of the Digital Asset Regulatory and Legal Alliance and co-founder of trading platform CrossTower, told CoinDesk the OCC is in its initial stage of rulemaking, meaning this is the best time for the industry to express its concerns and make suggestions to the agency.
“Once the broad policy has been etched, market participants and regulators will move to proposed rulemaking,” she said through a spokesperson. “At that stage, the ability to engage in dialogue about policy and the broad framework becomes more difficult. Thus, this is a critical time for market participants and regulators to jointly develop a framework in which all stakeholders are comfortable.”
A wide range of industry participants appear to agree: Novi (the rebranded Facebook subsidiary Calibra), ConsenSys, Celo, Axos Bank, the American Bankers Association, Figure Technologies, Chamber of Digital Commerce, Silvergate Bank, Ripple Labs and other respondents all supported the idea that banks and savings institutions can safely handle crypto-related services with the right amount of regulation.
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