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US regulator signals change to digital banking rules

A US federal banking regulator has called for public feedback on the use of cryptocurrencies ahead of what could be a change in the rules on digital banking.

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US regulator signals change to digital banking rules


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The Office of the Comptroller of the Currency (OCC), the only regulator with a national charter for banks, issued an advance notice of proposed rulemaking stating that it was "reviewing its regulations on bank digital activities to ensure that its regulations continue to evolve with developments in the industry". 

The notice asks for feedback by August 3 on a number of issues related to bank innovation, such as digital banking activities not covered by existing regulations; and challenges for banks resulting from new payments technologies and cryptocurrencies and cryptoassets, distributed ledger technology, artificial intelligence and machine learning.

Among the quesitons asked in the filing are: What are the barriers or obstacles, if any, to further adoption of crypto-related activities in the banking industry? Are there specific activities that should be addressed in regulatory guidance, including regulations? What new payments technologies and processes should the OCC be aware of and what are the potential implications of these technologies and processes for the banking industry? How are new payments technologies and processes facilitated or hindered by existing regulatory frameworks?

The notice comes just weeks after the appointment of fomer chief legal officer at crypto exchange Coinbase Brian Brooks as acting head of the OCC.

While at Coinbase, Brooks pushed for a digital currency to be developed by the private sector. He has also voiced his support for a federal fintech charter that allows fintechs to be licensed at a national level rather than on a state-by-state basis. The notice references this proposed charter but adds that it "is not seeking comment on its authority to issue a special purpose natioal bank charter".

However, there may be some oppposition to the OCC's federal fintech ambitions given the widespread opposition from financial instituions and state regulators. The OCC was defeated by New York's Department of Financial Services back in October in a legal battle over the national charter plan. 


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