Navigating Legal Challenges in Banking Charters

Brian Brooks got his start in traditional finance before joining Coinbase in 2018 and is currently the acting comptroller of the currency. In this episode, he discusses:

• how his background in traditional financial services led him to take a position at Coinbase
• whether the role blockchain and crypto will likely play in the financial future is being recognized at the federal level
• whether or not banks have always had the authority to custody crypto for their customers
• how he expects things to unfold in the coming years as banks begin to become more involved in crypto custody
• his thoughts on Kraken and others launching crypto banks and whether it will lead to the founding of other crypto banks
• how his office is pushing for a national fintech charter, and how it could affect less crypto-friendly states
• whether banks that work with crypto companies supporting unhosted wallets are prohibited from holding stablecoin reserves
• whether or not OCC regulations cover DeFi, and the regulatory challenges that open source protocols present
• whether he sees a time when governments and regulators participate in the governance of crypto platforms
• what roles he thinks public and private sectors, as well as commercial banks, should play in the creation of a central bank digital currency
• what stance the OCC might take around privacy in blockchain transactions
• how U.S. regulators can offer more clarity to the crypto industry
• and how he thinks the pandemic, its effect on the economy, and the government’s response through stimulus will affect the crypto industry

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Crypto.com: https://www.crypto.com

Episode links: 

Brian Brooks: https://twitter.com/BrianBrooksOCC

Office of the Comptroller of the Currency: https://www.occ.gov

Letter to authorize banks to provide crypto custody services for customers: https://www.occ.gov/topics/charters-and-licensing/interpretations-and-actions/2020/int1170.pdf

The significance of the letter for banks and crypto companies: https://www.forbes.com/sites/matthougan/2020/07/27/the-occs-notice-on-crypto-is-a-really-big-deal/#13aad8806301

The OCC’s statement on federally chartered banks and crypto custody: https://www.occ.gov/news-issuances/news-releases/2020/nr-occ-2020-98.html

His support for a federal licensing framework for crypto companies: https://www.coindesk.com/us-banking-regulator-suggests-federal-licensing-framework-for-crypto-firms

Questions about the OCC’s stablecoin guidance

https://www.coindesk.com/questions-occ-first-guidance-stablecoins

CSBS “One Company, One Exam” policy: https://www.coindesk.com/csbs-firms-explained

Battle with states over federal licensing program: https://www.politico.com/news/2020/08/31/currency-comptroller-reshape-banking-406393 

FinCEN’s 2019 Regulatory Guidance: https://www.fincen.gov/news/news-releases/new-fincen-guidance-affirms-its-longstanding-regulatory-framework-virtual

Federal Reserve says it is exploring a central bank digital currency: https://www.coindesk.com/fed-reserve-evaluating-digital-dollar-but-benefits-still-unclear-says-chairman 

His view that a CBDC should be designed by the private sector: 

https://www.theblockcrypto.com/post/69216/heres-how-brian-brooks-disagrees-with-fed-chair-jerome-powell-on-the-digital-dollar

The OCC’s Financial Inclusion Project: https://www.occ.gov/topics/consumers-and-communities/minority-outreach/project-reach.html

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