New OCC Head Michael Hsu to Review Former Comptroller Brian Brooks Crypto Guidance

Former Acting principal of the Office of the Comptroller of the Currency (OCC) Brian Brooks may have given cryptocurrencies a pass in Washington, but this may be short-lived if anything is to come out of recent inquiries by the new head of the agency.

OCC Head Cautious On Crypto

According to the newly appointed head of the OCC, Michael Hsu, a review of the past year's agency actions will be carried out.

In written testimony to the Senate Committee on Financial Services, Hsu said that he would be addressing issues surrounding the agency's performance benchmarks, interpretative letters and guidance regarding cryptocurrencies and digital assets, and pending licensing decisions.

He also said the review would compose a full internal and external review focusing on the impact of the policies and situational changes and possible alternatives.

Confirming the review process, Hsu said that the OCC is focused on responsible innovation, noting that the agency has an Office of Innovation.

Brian Brooks, who served as Coinbase’s legal counsel and is the current CEO of Binance US subsidiary, positioned the crypto space for wider adoption with an interpretative letter.

In the memo, he empowered banks to issue stablecoins, digital assets meant to track the price of fiat currencies. Accordingly, a trust charter was issued to the digital asset platform Anchorage.

However, not everyone saw this open support for the nascent industry as a wise decision, with certain members of the representatives issuing a letter to this effect. In the letter, the lawmakers questioned the OCC's recent unilateral actions in the digital asset space, noting that many frameworks need to be put in place before making these decisions.

Crypto Revolutionizing Banking Practices

Meanwhile, cryptocurrencies’ impact on the financial space cannot be denied. According to a hearing memo, the crypto boom has seen the emergence of online lenders, payment processors, and other fintech companies growing in market share.

These novel industry players are looking to get chartering licenses, enabling them to offer legacy-backed services without overzealous regulation by the OCC and the Federal Deposit Insurance Corporation (FDIC).

Speaking on this development, Hsu said that any fintech company that eventually gets the OCC's national charter would carry out its activities fairly and equitably while supporting the important goal of promoting credit availability. However, he wants the OCC to ensure new entrants fit into the wider banking system with little friction.

The OCC has so far issued three national licenses, including the Anchorage charter. The likes of Paxos and Protego also secured licenses from the agency.

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