Comptroller of Currency Requests Public Input on Crypto Regulations

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The Office of the Comptroller of the Currency (OCC) has announced they are asking for public input on details about blockchain in order to better oversee crypto activities. The OCC, which regulates financial institutions, has requested that comments be submitted by August 3rd.

The announcement, which is titled the “National Bank and Federal Savings Association Digital Activities” asks those familiar with the industry to explain how cryptocurrencies and distributed ledger technologies (DLT) are used in banking. DLT refers to a technique of data storage in which transactions are recorded in multiple places at once ⁠— there is no single central data store.

Adapting to the Changing Financial Industry

According to the OCC notice, the fintech industry is becoming so central to our banking system that the agency must ensure that they are up to date on the inner workings of the technology. The notice mentions the ubiquity of the technology saying, “The first cryptocurrency was created in 2009; there are now over 1,000 rival cryptocurrencies, and approximately eight percent of Americans own cryptocurrency.”

Fintech products are increasingly important as almost 50% of Americans bank on their phones and 85% of American millennials use mobile banking apps. The OCC needs to make sure they keep up with this growing industry, especially before writing regulations for it.

The OCC’s Questions

The OCC wants information on “activities related to cryptocurrencies or cryptoassets that financial services companies or bank customers are engaged in and what the barriers or obstacles to further adoption of crypto-related activities are in the banking industry.” They also want to learn more about possible applications of DLT in banking.

Some specific questions, as written in the notice, include:

  • What types of activities related to cryptocurrencies or cryptoassets are financial services companies or bank customers engaged? 
  • To what extent does customer engagement in crypto-related activities impact banks and the banking industry? 
  • What are the barriers or obstacles, if any, to further adoption of crypto-related activities in the banking industry? 
  • Are there specific activities that should be addressed in regulatory guidance, including regulations?
  • How is distributed ledger technology used, or potentially used, in banking activities (e.g., identity verification, credit underwriting or monitoring, payments processing, trade finance, and records management)?
  • Are there specific matters on this topic that should be clarified in regulatory guidance, including regulations?”

How to Answer

If you work in the fintech field or are an avid investor in cryptocurrency, you are encouraged to comment via the Federal eRulemaking Portal or by email to regs.comments@occ.treas.gov. Just be sure to include “OCC” as the agency name and “Docket ID OCC-2019-0028” in the comment. This is a way for people to have a direct impact on how an industry they are passionate about is regulated.