New OCC head requests review of cryptocurrency rules

The United States’ banking regulator, the Office of the Comptroller of the Currency, is set to review cryptocurrency-related rulemaking following Brian Brooks’ departure. 

Michael Hsu, the newly-appointed Acting Comptroller of the Currency, has requested a staff review of former OCC rulemaking regarding the crypto industry as part of his testimony before the House Financial Services Committee on Wednesday.

In prepared remarks, Hsu asked the OCC staff to review its cryptocurrency-related actions like updating the framework for chartering national banks and trust companies, interpreting crypto custody services as part of the banking business, and establishing an Office of Innovation. “At the OCC, the focus has been on encouraging responsible innovation. I have asked staff to review these actions,” the official said.

Hsu argued that the review of the OCC’s crypto rulemaking aims to address a fragmented agency-by-agency approach to major financial trends and set a proper regulatory perimeter. “To the extent there is interagency coordination, it tends to be tactical, to deal with a pressing issue, such as Facebook’s Diem,” he noted, continuing:

“My broader concern is that these initiatives were not done in full coordination with all stakeholders. Nor do they appear to have been part of a broader strategy related to the regulatory perimeter. I believe addressing both of these tasks should be a priority.”

The new Comptroller of the Currency stressed that his focus will be ensuring that OCC-supervised banks “operate in a safe and sound manner, meet the credit needs of their communities, treat all customers fairly, and comply with laws and regulations.”

Brooks departed the OCC in January 2021 after joining in March 2020. Also a former head of the legal team at Nasdaq-listed crypto exchange Coinbase, Brooks is now the CEO of Binance US, a subsidiary of the world’s largest crypto exchange, Binance.

The OCC took a number of major regulatory decisions for the crypto industry under Brook’s tenure including the authorization of federal U.S. banks to hold reserve currencies for stablecoins. In April, the OCC granted major stablecoin company Paxos a federal charter to form a national trust bank.