WASHINGTON—The Office of the Comptroller of the Currency is being asked by legislators to rescind interpretative letters allowing banks to engage in crypto activities.
Sens. Elizabeth Warren (D-MA), Bernie Sanders (I-VT), Richard Durbin (D-IL) and Sheldon Whitehouse (D-RI) have made the request, according to Yahoo Finance.
In an open letter addressed to Acting Comptroller Michael Hsu, the group stated they are concerned that several interpretative letters published in 2020 and 2021 under former Acting Comptroller Brian Brooks that allowed banks to provide crypto custody services, issue payments with stablecoins, bank stablecoin issuers and engage in other crypto-related activities "essentially granted banks unfettered opportunity" to engage in problematic crypto activities.
The interpretative letters, which also includes one published during Hsu's tenure, did not address any of the risks tied to crypto banking activities, the lawmakers stated.
‘Comprehensive Approach Needed’
"Given the risks posed by cryptocurrencies to banks and their customers, we request that you withdraw OCC Interpretive Letters 1170, 1172, 1174, and 1179 and coordinate with the Federal Reserve and the Federal Deposit Insurance Corporation to develop a comprehensive approach that adequately protects consumers and the safety and soundness of the banking system," the letter reads.
The OCC issued the letters between July 2020 and January 2021, when Brooks led the regulatory agency. At the time the crypto industry saw the guidance letters as potentially aiding mainstream adoption of crypto by letting regulated institutions – banks – become more involved in the industry, Yahoo Finance reported.