The office of the Currency Controller (OCC) has published new guidelines, allowing national banks and federal savings associations to offer police custody and stable without prior regulatory approval.
It marks an important development for the cryptocurrency sector, depending on the calls to end restrictive banking practices such as the Choke Point 2.0 operation.
OCC Occases the way to banks and crypto
The last directive, the letter of interpretation 1183, confirms that banks can engage in these activities under existing banking laws. This eliminates the previous requirement to obtain the non-comprehension of supervision before proceeding.
The new guidelines mark a major change in the regulatory policy, rationalizing the process of creating banks to integrate digital assets into their services. However, the OCC has stressed that if the requirement of approval has been lifted, banks must maintain strong risk management controls similar to those required for traditional banking operations.
“The OUC expects the banks to have the same strong risk management controls to support new banking activities as for the most traditional,” said Rodney E. Hood, the interim controller of the currency.
He added that this decision reduces obstacles to banks in search of activities related to cryptography. It marks significant development after a legal compensation and a decline against unfair regulations on the part of industry leaders like Brian Armstrong.
Recently, the CEO of Coinbase continued the FDIC (Federal Deposit Insurance Corporation) for trying to break the links between the banking and crypto sectors.
The key players in the cryptography industry, including CEO CERCLE, Jeremy Allaire, have enthusiastically welcomed the announcement of the OCC.
“Let’s go! Banks using USDC. Come soon to a blockchain near you. We are delighted to wire the existing financial system to the new Internet financial system. Circle Mint is open to business,” said Allaire.
Meanwhile, others, such as Crypto Marty Party analyst, underlined the economic impact of the decision. He said the milestone would allow banks to serve us as validators on public networks, hate crypto for customers and keep stablecoin.
Likewise, the popular analyst of Crypto Scott Melker, alias the wolf of all the streets, greeted the The reaffirmation of the WC that cryptographic activities are fully authorized in the American federal banking system.
It should be noted that the Bank of America (BOA) has recently been committed to launching a stablecoin if the new American regulations allow.
Perhaps with the last regulatory breakthrough, the BOA could follow this commitment, according to others like Ripple on the StableCoin market.
The CEO of the Custodia Bank not necessarily says a green light
Despite a general excitement, some industry experts have urged caution. The founder and CEO of the Custodia Bank, Caitlin, Long stressed that if the directives of the OCC are a positive step, wider regulatory obstacles remain.
“I want it to be so, but we are not yet completely there – here is why. There are nuances for the regulation of American banks, ”she wrote.
The leader of the mudguard bank said that the anti-Crypto directives of the Federal Reserve (Fed) and the FDIC remain in force. She said it continues to create obstacles for banks that wish to fully adopt digital asset services.
“In the midst of all the jubilation of the WADS News, the Choke Point 2.0 operation is not completed before: 1. Fed & FDIC also cancels their anti-Crypto guidelines, which is still in force, and 2. The Banque de la Garde explained Long.
With hindsight, at the beginning of 2023, the Custodia bank was denied a main account, which would give it access to the Liquidity installations of the Fed. Based on this, its position is that the Fed and the FDIC were much more detrimental to the cryptography of banking services than the OC.
Ben El-Baz, a founding member of the Hashkey group, offered a more optimistic perspective. He suggested that the WOT’s decision could put pressure on the Fed and the FDIC to follow the plunge.
“On a more optimistic note, it is possible that the OCC as a first engine helps to push the advice aligned subsequent from the FDIC and the Fed. Having an institution to go ahead is better than nothing, ”said Baz.
Nevertheless, it is a positive development in the right direction, but it could take some time so that banks can fully adopt these changes.
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