Brian Brooks, Coinbase’s former chief legal officer and the current U.S. Comptroller of the Currency, is pushing to consolidate licensing regulations for payment companies at the federal level in the United States.
Federal licensing for payments firms that do not accept deposits could open the door to further mainstream adoption of virtual currencies by allowing crypto payments firms to obtain approval to operate across multiple states. The U.S.’s patchwork of federal and state regulations has deterred many virtual currency firms from setting up shop in the United States.
However, analysts predict that many states will push back against federal licensing, citing an ongoing dispute over the OCC’s fintech charter with the New York Department of Financial Services.
In an interview with Law360, Crowell & Moring partner Michelle Gitlitz said:
“It would surprise me if the same thing didn’t happen again. I don’t see why a regulatory institution like the New York Department of Financial Services would take a different position with respect to a payment charter than they did with the fintech charter.”
At the end of August, John Ryan, president of the Conference of State Bank Supervisors (CSBS), published a statement expressing the association’s opposition to federal payment licensing and accusing the OCC of “disregard[ing] the statutory limits of its authority.”
“The OCC’s proposed payments charter is no different than the fintech charter already rejected in federal court and subject to a nationwide order preventing the OCC from accepting applications from a company that does not take deposits,” the letter said.
“State regulators are opposed to this unconstitutional expansion of power.”
Despite this, the Office of the Comptroller of the Currency announced it was prepared to accept applications from payment firms for a federal banking charter last week.
Brian Brooks’ appointment to head the OCC has been welcomed by the crypto sector, with Celsius founder and CEO Alex Masinsky tweeting:
I think most of #Cryptoland does not understand how big this is for everyone in our community. I hope Brian can get the lawmakers and regulators change their ways and open the doors for Crypto to scale. https://t.co/yZauzPXVBs
— Alex Mashinsky ©️ (@Mashinsky) September 11, 2020