Existing interpretations by the Office of the Comptroller of the Currency confirming national banks' authority to engage in custody and other activities related to cryptocurrency should be rescinded, according to Senators Elizabeth Warren, Sheldon Whitehouse, and Bernie Sanders.
In a joint letter of August 10 to Acting Comptroller Michael Hsu, the senators express concern "that the OCC's actions on crypto may have exposed the banking system to unnecessary risk" and call for the rescission of key interpretive letters. Specifically, they request the OCC to withdraw OCC Interpretive Letters 1170 (cryptocurrency custody services), 1172 (stablecoin reserves), 1174 (independent node verification networks and stablecoins for payment activities), and 1179 (clarification of banks' authority to engage in certain cryptocurrency activities and OCC authority to charter a national trust bank).
The letter also seeks detailed information from the OCC on which banks have obtained OCC permission to engage in crypto-related activities covered by OCC Interpretive Letters 1170, 1172, and 1174.
It is unclear whether or how Mr. Hsu will respond to the senators' request, but the letter is indicative of an increasingly hostile legislative and regulatory environment for banks' crypto-related activities. This environment will need to be monitored carefully by banks seeking to offer services to crypto firms and other market participants.