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Riku Tanaka
May 12 20:29

US banking regulator’s COO suggests cryptocurrency firms should be given federal banking licenses

An important regulatory body in the US may be open to the idea of permitting cryptocurrency organizations to be authorized as financial institutions on a federal level, as opposed to the current state-issued licenses.
Brian Brooks, COO of the US Office of the Comptroller of the Currency (OCC), the country's national bank watchdog, said on Monday (May 11) that he thinks cryptocurrency organizations could be considered for the national licensing system, if those same organizations can provide clients with payment services, as defined by the regulatory body.

While giving a talk at CoinDesk's Consensus, Brooks said numerous crypto organizations can be technically be classified as payment service providers, and it can therefore be sensible to consider these businesses, and other fintech firms such as Stripe, in a similar way as traditional banking institutions are dealt with by federal regulatory bodies.
If cryptocurrency firms were able to acquire federal licenses, these new businesses would have more options to develop their operations than just state-level remittance.
Brooks highlighted stablecoins, a few tokens and remittances as instances of where cryptocurrency companies may look progressively like financial institutions.
The OCC's fintech charter hinges on the principle that banking institutions accept and store money, give loans to clients and facilitate financial transactions, yet a some companies offer only one or maybe two of these services. However, these companies can still be classified as banks under the OCC's fintech charter.
The COO also talked about the fact that some cryptocurrency startups are making use of banking services, saying any organization that complies with the relevant laws ought to have the option to tap these services.
Brooks almost went as far as saying that he recommended that crypto companies could even possibly supplant the current financial framework, however he merely hinted at this and had not said it outright.
He also believes that the technologies that cryptocurrencies run on, specifically the decentralized nature of blockchains, could play a key role in changing the way the economy relies on a small number of financial institutions. If one large bank fails, the entire economy takes a big hit due to the way that banks are largely connected. Decentralizing the risk of could, if not stem this problem outright, then at least provide a few solutions, according to Brooks. Banks would be pushed to learn from cryptocurrency companies as they evolve in the