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U.S. Senate Banking Committee Requests Clarity on Cryptocurrencies

Digital This week, U.S. Sen. Mike Crapo (R-Idaho), who heads the Senate Committee on Banking, Housing and Urban Affairs, asked the Office of the Comptroller of the Currency (OCC) to fill his committee in on its Advanced Notice of Proposed Rulemaking for cryptocurrency services.

The use of cryptocurrency and blockchain technology has been becoming more relevant to the increasingly digitized mortgage and housing industry, according to reports from financial experts such as PwC Financial Services. The aforementioned OCC notice stated that "the first cryptocurrency was created in 2009; there are now over 1,000 rival cryptocurrencies, and
approximately 8% of Americans own cryptocurrency."

"Over the past two decades, technological advances have transformed the financial industry, including the channels through which products and services are delivered and the nature of the products and services themselves," according to the OCC.

Now that the OCC has sought input on the digital activities of banks and federal savings associations (comments were due by August 3, according to the notice),  Chairman Crapo's office stated, his letter requests an update from the OCC on its findings as well as information regarding next steps it intends to take with this technology.

The letter, addressed to Acting Comptroller Brian Brooks, reads as follows:

"The Senate Banking Committee has held hearings on cryptocurrencies and digitalization in the
payments system, including the impact of distributed ledger technology, blockchain and
stablecoins. The Office of the Comptroller of the Currency (OCC) has taken the lead in seeking
input on the digital activities of banks and federal savings associations by issuing a June 4
Advanced Notice of Proposed Rulemaking (ANPR) on a variety of areas important to financial
technology (fintech) and digital currency issuers.

Including:

  • 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; and
  • What new or innovative tools do financial services companies use to comply with regulations and supervisory expectations (i.e., “regtech”)?

Please provide the committee with an update on its findings and the next steps the OCC intends to take with this technology. 

Crapo goes on to say, "The cryptocurrency ecosystem is as diverse in its products and functions as the rest of financial services.  These and similar innovations are inevitable, beneficial and the U.S. should lead in their development."

The OCC recently published a letter that clarifies national banks' and federal savings associations' authority to provide cryptocurrency custody services for customers, he noted, adding that "it would be prudent to provide similar clarity for payments.  The U.S. should develop clear rules of the road that protect businesses and consumers without stifling future innovation."

About Author: Christina Hughes Babb

Christina Hughes Babb is a reporter for DS News and MReport. A graduate of Southern Methodist University, she has been a reporter, editor, and publisher in the Dallas area for more than 15 years. During her 10 years at Advocate Media and Dallas Magazine, she published thousands of articles covering local politics, real estate, development, crime, the arts, entertainment, and human interest, among other topics. She has won two national Mayborn School of Journalism Ten Spurs awards for nonfiction, and has penned pieces for Texas Monthly, Salon.com, Dallas Observer, Edible, and the Dallas Morning news, among others.
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