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US Senators Ask OCC to Withdraw Crypto Interpretive Letters
Practical Law Legal Update w-036-6357 (Approx. 6 pages)
US Senators Ask OCC to Withdraw Crypto Interpretive Letters
by Practical Law Finance
| Published on 17 Aug 2022 • USA (National/Federal) |
US Senators Elizabeth Warren, Sheldon Whitehouse, Richard Durbin, and Bernard Sanders wrote a letter to the Office of the Comptroller of Currency (OCC) asking it to rescind certain OCC interpretive letters that permit banks to engage in crypto-related activities and requesting that the OCC provide certain additional information on crypto-related activity.
On August 10, 2022, US Senators Elizabeth Warren (D-MA), Sheldon Whitehouse (D-RI), Richard Durbin (D-IL), and Bernard Sanders (I-VT) wrote a letter to the Office of the Comptroller of the Currency (OCC) asking it to rescind certain OCC interpretive letters permitting banks to engage in crypto-related activities and requesting that the OCC provide certain additional information on crypto-related activity. The letter requested withdrawal of the following OCC interpretive letters:
- Interpretive Letter #1170, dated July 22, 2020, permitting national banks and federal savings associations to provide cryptocurrency custody services (see Legal Update, OCC Clarifies Authority of Banks to Provide Cryptocurrency Custody Services).
- Interpretive Letter #1172, dated September 21, 2020, permitting national banks and federal savings associations to hold dollar deposit reserves backing stablecoins in certain circumstances (see Legal Update, OCC Issues Interpretive Letter Clarifying Authority of Banks to Hold Reserves Backing Stablecoins).
- Interpretive Letter #1174, dated January 4, 2021, permitting national banks and federal savings associations to act as nodes on an independent node verification network to verify customer payments and engage in certain stablecoin activities to facilitate payment transactions on a distributed ledger (see Legal Update, OCC Clarifies Authority of Banks to Use Stablecoins to Conduct Payment Activities and Other Banking Functions).
- Interpretive Letter #1179, dated November 18, 2021, confirming the OCC's authority to grant a national trust bank charter and clarifying that national banks and federal savings associations may engage in certain cryptocurrency activities provided they can demonstrate, to the satisfaction of their supervisory office, that they have controls in place to conduct the activity in a safe and sound manner (see Legal Update, Federal Banking Agencies Issue Joint Statement on Crypto-Asset Policy and OCC Issues Interpretive Letter on Bank Cryptocurrency Activities).
The letter also calls for coordination and a comprehensive approach to regulation between the OCC, Federal Deposit Insurance Corporation (FDIC), and the Federal Reserve.
Additionally, the letter includes requests for the OCC to, by August 24, 2022:
- Provide the names of any banks that have obtained permission to engage in crypto-related activities since the issuance of these interpretive letters and specify:
- the activities of any such banks and the estimated dollar volume of these activities; and
- whether the OCC has denied any bank requests to engage in crypto-related activities.
- Specify the number and names of banks regulated by the OCC currently engaged in any of the following activities:
- providing cryptocurrency custody services;
- holding dollar deposits serving as reserves backing stablecoins;
- acting as nodes to verify customer payments; or
- facilitating stablecoin payment transactions.
- In connection with the banks listed in the above question immediately above, specify which banks engaged in the above-listed activities prior to the issuance of Interpretive Letter #1179.
- For each OCC-regulated bank engaged in crypto-related activities, specify the estimated total dollar volume of the activities.
- Are banks regulated by the OCC engaging in other crypto-related activities, such as lending crypto assets or trading crypto assets or crypto derivatives? If so, specify the banks, activities they are engaging in, and estimated dollar volume of each activity.
This Update is based in part on material provided by Thomson Reuters Regulatory Intelligence (TRRI).