Even with increasing adoption rates, traditional Banks still struggle with the idea of digital currencies.
And the Office of the Comptroller of the Currency feels it can provide further guidance to work around banks’ fears concerning crypto.
The Treasury Unit, the official supervisor of banks and the Federal Savings Association, has given out guidelines in the past months to express its opinion on how banks can partner with digital currencies.
According to the agency, this move will help eliminate some financial institutions’ notion that all crypto-based transactions come with high risks that call for time-consuming and expensive supervision.
“They believe the entire digital currency idea is way too risky for them, and most are still hesitant to test the waters,” said Daniel Stipano, an ex-deputy chief executive at the Office of the Comptroller of the Currency.
The move is part of the efforts by Brain Brooks, OCC’s interim chairman, as of May. His goal is to install systems that will help banks welcome crypto safely. “We intend to break down crypto,” he says.
The popularity and use of crypto are inevitable, yet banks still need extra guidance to indulge in operations that involve digital currencies.
Even banks haven’t defined clearly what they believe is okay and what they find risky. Many banks worry about the link between digital currencies and fraud, as reported by a September poll by the Association of Certified Anti-Money Laundering Specialists and the U.K.’s Royal United
Services Institute. Almost 63 percent of the interviewed banking institutions see cryptocurrency payments as a danger instead of an opportunity.
The OCC has long received requests from institutions like The American Bankers Association, asking it to address banks’ concerns through
- Establishing anti-money-laundering abidance standards tied to cryptocurrencies.
- Motivating other watchdogs to stick to those guidelines.
Perhaps the pressure explains OCC’s baby steps towards a remedy for the matter. It issued its first letter to national banks & federal savings associations in July, asking them to offer crypto custody services for clients and keep unique keys tied to cryptocurrencies.
Parting Shot
According to the OCC, there’s a need for guidance and supervision because some banks are already deep in crypto services such as stablecoins. Hopefully, banks will see sense in the Office of the Comptroller of the Currency and change their opinion towards cryptocurrencies.
Author Bio: Blair Thomas has been a music producer, bouncer, screenwriter, and for over a decade has been the proud Co-Founder of eMerchantBroker, the highest-rated cryptocurrency payments processor in the country. He has climbed in the Himalayas, survived a hurricane, and lived on a gold mine in the Yukon. He currently calls Thailand his home with a lifetime collection of his favorite books.
