Senate Committee on Banking, Housing and Urban Affairs Chairman Sherrod Brown (D-OH) is encouraging the Office of the Comptroller of the Currency to review varied cryptocurrency bank charters.
In correspondence to Acting Comptroller Michael Hsu, Brown requested an analysis of charters granted to several cryptocurrency exchanges by the Trump administration – detailing what Brown described as the risk of granting charters to non-banks and the need to ensure consumers and the banking system are protected.
“I am concerned about a number of national trust charters granted by the prior leadership of the OCC,” Brown wrote. “Shortly after former Acting Comptroller Brian Brooks left the OCC to join Binance, a cryptocurrency exchange, several nontraditional firms that specialize in digital and cryptocurrency activities – including Paxos, Protego, and Anchorage – received conditional national trust charters from the OCC.”
Brown maintains the OCC is not able to regulate the entities comparably to traditional banks, considering the uncertainties present in the digital asset landscape identified by other regulators, the volatility of digital asset valuations, and the disproportionate influence individuals can have on entire cryptocurrency markets.
“It is also unclear whether the OCC engaged in the appropriate due diligence to stand behind this ‘seal of approval’ before granting these charters,” Brown concluded. “Former Acting Comptroller Brian Brooks actively encouraged cryptocurrency companies to apply for a national trust charter because it had ‘relatively easy requirements’ and is ‘just a faster charter to get.’ Not only could these charter approvals lead customers to underestimate the risks related to these assets, but it could undermine faith in the safety and stability of the entire banking system.”