WASHINGTON — Senate Banking Committee Chair Sherrod Brown, D-Ohio, called on the Office of the Comptroller of the Currency to "reassess" the agency's conditional charter approvals for cryptocurrency firms and halt any future approvals.
In a letter addressed to acting Comptroller Michael Hsu, Brown argued that the crypto firms conditionally approved by the OCC in recent months “seek access to the benefits of a bank charter” without meeting “the same set of regulatory and consumer protection standards that banks are required to meet.”
“A firm that cannot meet the rigorous requirements applicable to other banks should not be allowed to present itself to the public as a bank,” Brown wrote in the letter, dated May 19 and first reported by
Under the two acting comptrollers preceding Hsu, Brian Brooks and Blake Paulson, the OCC issued conditional approvals for national trust charters for three crypto firms:
In the letter, Brown said the OCC’s regulatory approvals were cause for concern, particularly because such firms point to their federal oversight to suggest “their business model is as safe, stable and dependable for customers as a local community bank.” Paxos, for instance, claims to have “cutting-edge technology with bank-level oversight,” the letter said.
“The fact is, given the many uncertainties present in the digital asset landscape as identified by other regulators, the volatility of digital asset valuations, and the disproportionate influence individuals can have on entire cryptocurrency markets, the OCC is not in a position to regulate these entities comparably to traditional banks,” Brown wrote.
Hsu, who started at the agency just last week, had already suggested on Wednesday that he intends to
"At the OCC, the focus has been on encouraging responsible innovation. For instance, we created an Office of Innovation, updated the framework for chartering national banks and trust companies, and interpreted crypto custody services as part of the business of banking,” Hsu said in congressional testimony earlier this week. “I have asked staff to review these actions."
Rebecca McClain, a spokesperson for Paxos, said in a statement, “The future of finance rests on the ability of crypto and blockchain infrastructure to replace antiquated banking systems for faster and safer transactions."
"We welcome scrutiny because building trust in this industry is essential to building an open, digital economy. Paxos is one of the most regulated operators in the industry and meets the requirements of all New York State chartered banks and, we believe, federally chartered non-depositories," McClain said. "We believe all companies in this industry must be regulated and subject to the same safety and soundness protections as other banks and trust companies. We look forward to working with Chairman Brown to strengthen the banking system with our proven technology.”
