April 1, 2023

U.S. banking regulator proposes licensing cryptocurrency firms at the federal level

United States Commercial Banks Regulatory Commission (OCC) Operations Director Brian Brian Brooks) proposed to license cryptocurrency startups at the federal level.

Brooks believes cryptocurrency firms thatengaged in the provision of payment services, must receive a license that allows them to work freely throughout the country, without the permission of the regulatory authorities of each state.

Former Director of Legal AffairsCoinbase believes that many cryptocurrency organizations can be described as payment companies, so it makes sense to regulate them on a par with banks and financial institutions.

Many cryptocurrency startups often have difficulty accessing banking services. According to Brooks, this is unfair if firms comply with applicable law.

“As industry develops, startups createsustainable risk management systems as required. Therefore, such firms have the full right to banking services. Banks are required to serve all legal organizations, and not to discriminate against them only because they use the latest technology. The cryptocurrency industry is the banking industry of the 21st century, and banks have a lot to learn from startups, ”Brooks said.

He added that cryptocurrency projects canimprove the existing banking infrastructure, eliminating its shortcomings and reducing risks. Brooks suggested that young payment firms have a good chance of introducing effective decentralized solutions into the banking infrastructure, which will lead to changes in the bank charter.

The issue of issuing federal banking licenses fortechnology companies providing financial services began to be discussed by US regulators a year and a half ago. In addition, in the fall, OCC joined the Global Financial Innovation Network to create an international sandbox for fintech companies.