US Banking Regulator Advises Federal Licensing Framework for Crypto Firms
Brian Brooks, Chief Operating Officer of the U.S. Office of the Comptroller of the Currency (OCC), America’s national bank supervisor, stated on Monday that he believes Crypto firms are likely to fall under a federal licensing regime – if they provide payment services.
JUST IN: @BrianBrooksCB, now a US banking regulator, said creating a federal license for crypto startups might make more sense than subjecting them to 50 different state money transmitter approvals.@nikhileshde reports#ConsensusDistributedhttps://t.co/h26o0IVB7i
— CoinDesk (@CoinDesk) May 11, 2020
A large number of Crypto companies are payments companies, and is, therefore, they should be treated as startups along with other fintech firms – the same way as banks are treated federally, according to the former Coinbase chief legal officer.
He stated, “Crypto is one of those areas where we have to ask ourselves, does it make more sense to think of crypto projects as local projects or global projects. If they’re global, then the rationale for a single national license makes more sense.” Furthermore, “Increasingly, it looks a lot like crypto is banking for the 21st century.”
This would result in the provision of an alternative for start-ups to the state-level money transmitter licenses when building operations.
He addressed stablecoins, token, and remittances as examples of crypto startups resembling banking services. The charter is unique as compared to the OCC’s fintech charter where it doesn’t apply to lend.
The fintech charter is predicated on the very fact that banks acquired deposits, made loans, and were involved in payments, however, some institutions might provide just one or two of those services. These institutions are still regarded as banks under the OCC’s fintech charter.
According to him, borderless things like cryptocurrency makes more sense as a licensed structure.