OCC unveils fintech office plan in quest to understand digital assets
The Office of the Comptroller of the Currency (OCC) has announced that it will set up an Office of Financial Technology to keep up with the changing pace of finance.
According to the official announcement from the OCC, the new office will begin operations in early 2023 and will work in synergy with the agency’s Office of Innovation. The OCC’s planned move is aimed at virtual currencies, and the proliferation of stablecoins has made it imperative for the body to create a new arm.
“Financial technology is changing rapidly, and bank-fintech partnerships are likely to continue to grow in number and complexity,” said Michael J. Hsu, Acting Comptroller of the Currency. “To ensure that the federal banking system is safe, sound and fair today and well into the future, we must have a deep understanding of financial technology and the financial technology landscape.”
The OCC says the new department will be led by a chief financial technology officer from within the agency’s ranks. The role is Deputy Head and will report directly to the Senior Deputy Head of Banking Supervisory Policy.
“The establishment of this office will enable us to be more agile and promote responsible innovation, consistent with our mission,” Hsu added. The OCC also noted that the incoming Office of Financial Technology would “provide strategic leadership” and offer an in-depth perspective on the regulation of digital assets in banking.
The decision to create the new arm comes on the heels of the agency increasing the level of scrutiny on bank-fintech partnerships as it looks to improve the risk profile of financial institutions in the country.
OCC’s tango with virtual currencies
In 2020, the OCC wrote a letter to an undisclosed bank offering ideas on how banking institutions could offer “cryptocurrency custody services” for their customers in what was seen as a bold move.
“This letter also reaffirms the OCC’s position that national banks may provide permitted banking services to any lawful business they choose, including cryptocurrency businesses, as long as they effectively manage the risks and comply with applicable law,” the letter said.
In January 2021, the OCC approved the use of stablecoins for the settlement of financial transactions from banks, which several industry players described as a major win. Since the historic declaration, the OCC appears to have taken a cautious stance on digital assets, but that could all change with the launch of the new arm.
See: BSV Global Blockchain Convention panel, The Future of Financial Services on Blockchain: More Efficiency & Inclusion
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