Latest news with #OfficeoftheComptrolleroftheCurrency
Business Times
4 days ago
- Business
- Business Times
US regulators to play key role in next crypto, bank fight
[WASHINGTON, DC] A major battle between crypto firms and traditional lenders over interest and bank charter applications is poised to be decided by regulators appointed by US President Donald Trump, who has been a vocal supporter of digital currencies. The Genius Act, which requires stablecoin issuers to formally register and hold dollar-for-dollar reserves, sets in motion a rule-writing process with US regulators that will determine what qualifies as generating interest on stablecoins and how far they can go in acting like a traditional bank. Trade groups, though, are already pushing back against attempts to grant bank charters to crypto firms and find workarounds for yield-generating stablecoins. 'There's a huge fight brewing between the banks and the non-bank stablecoin issuers,' said Caitlin Long, founder of Custodia Bank, a provider of digital-asset services. During the first Trump administration, the Office of the Comptroller of the Currency (OCC) sought to expand the services a trust bank can provide, with some saying it could include potentially making loans and settling payments. This summer, crypto firms including Circle Internet Group and Ripple Labs have applied for national trust bank charters and the current slew of applications is now a test of that OCC interpretation. Some trade groups opposed the move in July, arguing that the OCC should not have made the determination without public comment and that the move is a 'loophole' for trust banks to take advantage of the benefits of traditional banks without corresponding regulation. 'If the applicants are successfully able to establish themselves as national trust banks that do not primarily provide fiduciary services, but instead provide traditional banking services like payments, then, as the associations anticipated in 2021, other companies will follow, presenting material risk to the US banking and financial system,' the groups wrote in a July letter. BT in your inbox Start and end each day with the latest news stories and analyses delivered straight to your inbox. Sign Up Sign Up A spokesperson for the OCC declined to comment. For crypto firms, these charters could provide a multitude of benefits, including no longer having to apply for licences state-by-state to do business and a stronger degree of legitimacy. 'It's the momentum that we need as a country to push forward,' said Stuart Alderoty, chief legal officer of Ripple and president of the National Cryptocurrency Association. 'It's a good thing for the Americans who already own crypto and for those who are crypto curious.' The trust bank charter provides an avenue for crypto firms to better compete against banks that have long existed in the space, according to Long. 'If the OCC gives these trust charters rather than full bank charters, these banks will have 10 to 15 per cent of the capital requirements of being a fully fledged bank and are not subject to all the regulations that apply to banks,' Long said. 'If the OCC is basically back door slashing the capital requirements and the regulations on banks, why wouldn't the banks convert to trust companies instead of being a bank as well.' For banks, the entrance of these firms into traditional finance is both an opportunity for collaboration and intense competition. Nathan McCauley, the head of Anchorage Digital, said traditional finance dramatically increased its outreach to his company and others in the run-up to the passage of the crypto legislation. Some of the nation's largest banks have since announced partnerships with digital asset firms, including JPMorgan Chase and Coinbase Global reaching a deal to directly link customers' bank accounts to their cryptocurrency wallets. But the bank industry is also nervous about competing with the crypto industry, which has a different approach to innovation compared with traditional financial institutions. 'This is an industry that doesn't think it needs to wait for rules, unlike the banking industry,' said Karen Shaw Petrou, a managing partner of Federal Financial Analytics, where she analyses financial firms, including lenders. 'Stablecoin issuers just go for it and that's going to unsettle the banks more than probably anything.' Crypto firms are also looking at ways to generate fresh monetary benefits tied to stablecoins after the banking lobby successfully pushed for a ban on issuers providing interest to their customers under the Genius Act. The digital asset is primarily used by traders to get in and out of other cryptocurrencies, but is also increasingly used for payments. When that asset is not actively part of a payment, it sits in an account, and companies are now not allowed to offer users yield for depositing their tokens into yield-bearing accounts. 'Banks, and lawmakers who receive donations from banks, are very concerned that a yield-bearing stablecoin that blurs the line between savings vehicle and a payment vehicle makes it much less attractive to have a checking account,' said Zach Shapiro, head of policy at the Bitcoin Policy Institute. Companies are now looking to expand stablecoin offerings as regulators begin the process of explicitly defining what interest looks like in the space and what is permissible for companies. Recently, Circle announced a partnership with Binance for an off-exchange collateral where customers can park their money when they are not making a payment. The largest US crypto exchange, Coinbase, already offers a rewards programme for certain consumers, which some in the banking industry argue could potentially be illegal under the no-interest provisions of the Genius Act. Coinbase disagrees, saying the programme has been tailored to be in compliance with the law. 'The statutory language is vague and has room for exception, but that's when the fun starts,' Petrou said. BLOOMBERG
Yahoo
6 days ago
- Business
- Yahoo
Trump expected to sign executive order putting pressure on big banks over 'politicized debanking'
President Trump is expected to sign an executive order on Thursday that ups his administration's scrutiny over whether big banks denied services to consumers and businesses based on political or religious grounds. The action calls for federal bank regulators to investigate if the decisions made by financial institutions to deny access to certain customers were 'politicized or unlawful debanking.' Regulators are also called to review their supervisory data for instances of unlawful debanking based on religion and refer such cases to the Attorney General. Institutions found to have encouraged politicized or unlawful debanking will face remedial actions, including fines or consent decrees, according to the order. The order also calls for bank regulators to strike a particular kind of risk assessment from their guidance and supervision efforts known as reputational risk. Two federal bank regulators — the Federal Reserve and Office of the Comptroller of the Currency — have already eliminated reputational risk as part of their bank examination programs. The Small Business Administration will also be tasked with requiring institutions to take efforts to reinstate customers previously denied services unlawfully. The order did not lay out further details for how the investigative efforts by regulators will unfold, including which lenders these agencies will choose to scrutinize first. The order is also another boon to crypto, which, during the Biden era, was flagged by regulators as a higher-risk industry for lenders. It also reflects how the president's own interests continue to shape policymaking this year. On Tuesday, President Trump claimed that the country's two largest banks — JPMorgan Chase (JPM) and Bank of America (BAC) discriminated against him and other conservatives by denying them services. He cited his own personal experience as an example. "The banks discriminated against me very badly,' Trump said in a Tuesday morning interview with CNBC's 'Squawk Box.' The president is far from the only entity carrying the Trump name that has claimed denial of banking services. Earlier this year, the Trump Organization sued major credit card lender Capital One (COF) for allegedly debanking hundreds of its accounts following the Jan. 6, 2021, attack on the US Capitol in Washington, D.C. The bank has since said the lawsuit failed to include any facts to back the claim that the moves were politically motivated. For years, conservatives have claimed that US banks have denied accounts to certain customers for political reasons. Crypto companies and their executives have also claimed they have lost or were denied banking services; Coinbase Global executives have shared several accounts. Another criticism heard from both Republican and Democratic lawmakers is that banks can use debanking too aggressively as a legal and reputational risk-management tool when following the broad aim of preventing fraud, money laundering, terrorism, and other crimes. And that, critics have said, has led to incorrectly evicting or refusing customers service. Lawmakers have said that there have been thousands of debanking complaints from consumers in recent years. However, US lenders must follow guidance handed down by regulators that calls for lenders to assess customers based on specific risk criteria including reputational race, gender, religion,s and national origin. However, US lenders must follow guidance handed down by regulators that calls for lenders to assess customers based on specific risk criteria, including reputational risk. Arguably, that dynamic gives banks greater discretion when weighing whether customers signaling questionable behavior are too risky to bank. It also grants regulators wider authority to lay out what sort of activity lenders should pay closer attention to. David Hollerith is a senior reporter for Yahoo Finance covering banking, crypto, and other areas in finance. Click here for in-depth analysis of the latest stock market news and events moving stock prices Sign in to access your portfolio
Yahoo
31-07-2025
- Business
- Yahoo
Revolut mulling US bank acquisition to accelerate licencing process
Revolut is reportedly considering the purchase of a US banking institution as part of its strategy to rapidly obtain an American banking licence, while it continues to await similar approval in the UK. The fintech is exploring the acquisition of a nationally chartered bank, which would enable it to offer lending services in the US, reported Financial Times citing sources familiar with the situation According to these sources, acquiring an existing bank would facilitate a quicker expansion into the US market compared to applying for a banking charter independently. The company is looking at targeting a cost-effective bank that already possesses a national licence, the report said. While no definitive decision has been made regarding the acquisition of a US bank, Revolut is also considering the option of applying for a banking licence on its own, as indicated by another source. The perception that the Office of the Comptroller of the Currency, the US banking regulator, would expedite the bank charter process under the deregulatory agenda of President Donald Trump, has influenced this consideration. Revolut, which boasts a global customer base of 60 million, is also in discussions for a $1bn funding deal that would elevate its valuation to approximately $65bn. Additionally, the fintech has explored the possibility of acquiring a bank in the Middle East as part of its global strategy. Founded in 2015, Revolut recently acquired Argentine bank Cetelem from BNP Paribas. The company currently holds banking licences in Lithuania, enabling it to operate across the EU, as well as in Mexico. Revolut has yet to receive full authorisation to function as a comprehensive bank in the UK. After a lengthy three-year application process, its banking licence was approved last year, albeit with certain restrictions until it meets specific regulatory conditions. A year later, the company still faces limitations on its lending capabilities within the UK. The approval of its licence initiated a "mobilisation" phase, during which Revolut's banking division is permitted to accept deposits of only £50,000 while it develops its IT infrastructure, risk management, compliance systems, and other essential operations. The Bank of England's Prudential Regulation Authority has indicated that the mobilisation phase for newly licenced banks "cannot continue indefinitely and should take no longer than 12 months," a timeframe that Revolut surpassed last week. "Revolut mulling US bank acquisition to accelerate licencing process – report" was originally created and published by Retail Banker International, a GlobalData owned brand. The information on this site has been included in good faith for general informational purposes only. It is not intended to amount to advice on which you should rely, and we give no representation, warranty or guarantee, whether express or implied as to its accuracy or completeness. You must obtain professional or specialist advice before taking, or refraining from, any action on the basis of the content on our site. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
18-07-2025
- Business
- Yahoo
Trump to Sign the Historic GENIUS Act Into Law. What Does It Mean for Crypto?
The "Guiding and Establishing National Innovation for U.S. Stablecoins Act," otherwise known as GENIUS, will become law later this Friday when U.S. President Donald Trump signs the first major piece of legislation addressing digital assets. This is a historic law for the digital assets industry, which has been craving for regulatory clarity for years. But what is it? The GENIUS bill, which started in the Senate, sets up a regulatory framework to address stablecoins, cryptocurrencies whose values are pegged to the value of another asset — usually the U.S. dollar. The U.S. dollar stablecoin industry, with a $267 billion market capitalization, is largely dominated by Tether and Circle (CRCL) and primarily used as an intermediate asset for trading or a tool for accessing the U.S. dollar in countries with hyperinflation or other monetary issues. The GENIUS Act creates a definition for payment through stablecoins. The law assigns the Federal Reserve and the Office of the Comptroller of the Currency — two of the major U.S. bank regulators — tasks overseeing their issuance. The Fed will be tasked with the big bank issuers, while the OCC will oversee nonbank issuers with more than $10 billion in stablecoins. State regulators can still oversee certain issuers above the $10 billion threshold if they meet certain criteria and can secure a waiver. The bill also defines reserve requirements and creates requirements for issuers to regularly share information about their reserves. The reserves themselves must be in U.S. currency, demand deposits, Treasurys and other "approved assets." Why does it matter? Essentially, this law will translate into potentially clear regulatory frameworks for using stablecoins for everyday financial transactions, which is good news for crypto companies and consumers, according to some observers. "This bill will empower American businesses and consumers and enable them to take advantage of the next iteration of financial innovation," said Kirsten Gillibrand, a longtime Democrat sponsor of stablecoin legislation. This could also help crypto become more mainstream for the masses, help accelerate further innovation in the financial system, leveraging the blockchain technology. "This new stablecoin law will help unlock technologies that will transform how value moves around the world, expand access to the financial system, and unlock new economic opportunities for millions. We're just scratching the surface of what's possible," said Avery Ching, CEO and co-founder of Aptos Labs. Another part of the bill that might help legitimize the digital assets revolution is that it treats stablecoin issuers as financial institutions as far as anti-money laundering rules go, putting in place requirements on what sort of customer data these companies need to collect and verify. Which lines up with the efforts from some of the crypto firms hoping to become a bank. For example, recently, Circle (CRCL), the company behind the USDC stablecoin, said it has filed an application with the OCC to form a federally regulated national trust bank. Such a charter would bring Circle under direct OCC oversight, aligning it with how traditional financial institutions are regulated. Although the bill has been applauded by pro-crypto parties and firms, some Democrats have issued warnings that the bill does not go far enough to protect consumers or block public officials from benefiting from their crypto activities, pointing to the Trump-affiliated World Liberty Financial and its USD1 stablecoin. However, while Democrats did force a slowdown in work on GENIUS on the Senate floor earlier this year, they ultimately voted for the bill after some changes. The bill saw massive bipartisan support in both the House and in to access your portfolio
Bloomberg
02-07-2025
- Business
- Bloomberg
Payments Firm Wise Seeks US National Trust Bank Charter to Access Fed Payments
By , Yizhu Wang, and Emily Mason Save Wise Plc wants to create a national trust bank in the US, in the latest sign of its growing focus on America as it works on moving its main share listing to the country. The London-headquartered payments firm filed its application to be directly regulated by the US's Office of the Comptroller of the Currency on June 16, documents show. Its US hub will be in Austin, Texas, where the firm already has some 450 staff.
