- Office of the Comptroller of the Currency’s ANPR notification directs that banks may hold cryptocurrency on behalf of their clients.
- PNC Bank, US Bank and several other financial institutions are gearing up to provide crypto custody solutions to customers.
- Brian Brooks, head of OCC and former Coinbase executive says the goal is to bring “responsible innovation” for adapting changes in financial needs.
In recent, multiple national banks responded to the Office of the Comptroller of the Currency (OCC)’s Advance Notice of Proposed Rulemaking (ANPR) published in June, which asked the general public to weigh in before Aug. 3 This is clearly an indication how cryptocurrencies and other fintech tools are expected to revolutionise the financial landscape. Notably, several banks, including the USA Bank and PNC, indicated they might be interested in offering a range of crypto custody solution for stakeholders.
Foundations of Crypto Banking
The Office of the Comptroller of the Currency (OCC) is a federal agency that oversees the execution of laws relating to national banks. A letter published by the body stated that banks may hold cryptocurrency on behalf of their clients, and laid emphasis on the fact that they must meet the financial services needs of their customers, which also includes cryptocurrency for ten million Americans at present.
Overall, the notification has been appreciated by stakeholders, and many banks and other financial organisations have reached out to OCC for further clarification on the issue. Their queries ranged from details on which digital asset services they would be in a position to offer to the rules and regulations they are expected to adhere to.
PNC Bank, the 7th-largest bank in the US, has welcomed it as a step in the right direction for the banking sector, and appreciated OCC’s move to include innovative technology such as ledger, crypto assets and Artificial Intelligence.
On similar notes, Dominic Venturo, chief digital officer from the US Bank remarked that a concrete regulatory framework is the need of the hour, which can be brought about by a well-defined classification of crypto assets and addressing such activities. He also urged OCC to differentiate between utility tokens, stablecoins and exchange tokens with more clarity; and specify the requirements for providing custody services and cross-border restrictions; adding that “the extent consensus rules must be a part of a transaction.”
Fintech and Digital Assets
The ANPR addresses specific topics on domains such as artificial intelligence and machine learning, cryptocurrency, distributed ledger technology, and new payments technologies, among others. Importantly, the letter also implies that banks must continue to exercise caution by reaffirming OCC’s stand that national banks can give services to any business (lawful) they choose, including crypto businesses, so long as they adhere to the law and effectively manage the risks.
OCC is currently helmed by former Coinbase executive, Brian Brooks, who says he’s looking to bring “responsible innovation” to the fore to adapt to the changing fashion in which average Americans are handling their money today.
Most agree that this change will act as a catalyst in integrating cryptocurrency with mainstream finance, and building trustworthy custody solutions would not only amp up business across financial institutions, but also attract excellent investment opportunities.