- The US Office of the Comptroller of the Currency proposes a new regulation which would give fair banking access to cryptocurrency companies.
- The regulation would apply to large banks with over $100 billion in assets after several incidents of such banks restricting access to firms that are operating in politically contentious markets.
- The proposal is open to public feedback until the 4th of January.
The US Office of the Comptroller of the Currency (OCC) – an independent bureau within the US Treasury – is proposing a regulation that would stop large banks from discriminating against “disfavored” customers like cryptocurrency companies. The new regulation would seek to prohibit large banks from excluding customers from certain industries.
Regulation to Provide Fair Access to Banking For Lawful US Businesses
The OCC proposal noted that “Organizations involved in politically controversial but lawful businesses… are entitled to fair access to financial services under the law (p. 10)”. If the regulation is passed, any business that meets objective and quantitative criteria will be entitled to fair banking access. The cryptocurrency industry would not be the only sector that would benefit from the regulation.
In recent years, oil and gas companies, independent ATM operators, and firms related to gun manufacturing have faced difficulties with the US banking sector. There have been cases of large banks like Citigroup and Bank of America restricting business with firms that are operating in politically contentious markets.
Marco Santorini – Chief Legal Officer of Kraken Exchange – noted that the development strikes “as an idea whose time has come”. The regulation is targeted at large banks who Santorini commented are the main “culprits”. Specifically, the regulation applies to banks with over $100 billion in assets.
The Banking Sector’s Cautious Approach to Cryptocurrency Customers
Access to banking services has historically been a bottleneck for the growth of the cryptocurrency industry. To date, US entrepreneurs in the cryptocurrency industry have struggled to secure banking services, with many banks taking an extremely cautious approach to the industry.
The OCC’s imperative to improve banking relationships for cryptocurrency companies in the US has been made evident since an announcement made in July. In a public letter, the OCC clarified how national banks can treat cryptocurrency customers.
The letter echoed the regulation proposal’s stance by stating that “national banks may provide permissible banking services to any lawful business they choose, including cryptocurrency businesses.” If the regulation finalizes, large banks would be required to provide services to lawful US businesses regardless of industry. The regulation proposal is currently open to comment with public feedback due by the 4th of January.