US regulators push back against banks that oppose pursuing virtual currency trust charters

The traditional banking industry is trying to stem the proliferation of financial institutions seeking charters as trust banks to serve digital asset customers, and Office of the Comptroller of the Currency Commissioner Jonathan Gould said such hesitance “risks reversing innovation.”

“The OCC hears from established national banks almost every day about unique initiatives for exciting and innovative products and services,” he said at the Blockchain Association Policy Summit in Washington on Monday. “All of this strengthens my confidence in the OCC’s ability to effectively supervise the new activities of new entrants and incumbent banks in a fair and equitable manner.”

Gould said the application process for newly chartered banks (de novo banks) had come to a near standstill, but over the past year the number of applicants has returned to 14, many related to digital assets and other financial technology services.

“There is no good reason to think about digital assets in any other light,” he said. “Furthermore, it is important that banks, including today’s National Trust Bank, not be trapped in the technology and business of the past.”

Mr. Gould’s agency oversees national banks and trusts and is the only federal chartering authority for banks. The OCC has been slow to grant licenses to cryptocurrency companies, with Anchorage Digital remaining the only OCC-licensed cryptocurrency bank for many years. But last month, crypto bank Erebor received its first provisional license under Gould’s watch.

Banking regulators under President Donald Trump’s administration have quickly reversed previous resistance and risk aversion targeting crypto banking, and Gould said the OCC and Federal Deposit Insurance Corporation are jointly preparing rules to eliminate “reputational risk” from supervisory regulations.

Gould suggested that the financial system needs to “evolve from the wire to the blockchain.”

And he warned that his agency is reviewing banks’ debankment practices regarding cutting off services to crypto companies and their executives.

Read more: Coinbase faces criticism from traditional bankers for promoting trust bank charter