During Brian Brooks's tenure as Acting Comptroller, the OCC issued a few letters in 2020 and 2021 that allowed banks to provide some crypto services. These services included custody services, issuing payments with stablecoins, and being able to bank for stablecoin issuers. The idea and reason behind with was to grant banks the opportunity to engage in this industry and sort of serve as a bridge between traditional finance and crypto. In a letter to Acting Comptroller Michael Hsu Senator Elizabeth Warren, Bertie Sanders, Richard Durbin, and Sheldon Whitehouse ask Mr. Hsu to rescind these letter and explain how banks are getting involved with crypto. 

Both the message and timing of this letter is rather interesting for a few different reasons. Arguably the biggest question would be the timing of this letter. As it was done while all of Congress is on recess but also because Congress, which includes the Senate, is aware the Federal Reserve was moving towards issuing guidance for Crypto banks. Not even a week later the Fed issued said guidance for Crypto banks. By asking for these letters/guidance to be rescinded it creates confusion since you would be left with two important regulators issuing differing guidance. Something like this gives both the crypto investor but more importantly the traditional investor, those invested in the stock market, a sense of government weakness and disorder.

Even in a bear market crypto currencies have remained very popular with the younger demographic. This demographic is extremely important for elections as they tend to be the ones who make up their mind later on in the election cycle. With midterms approaching it would be an insane move for either party to do anything that could cast them in a negative light with such a popular industry. Upsetting or disrupting this base could lead to a huge backlash leading to those member being either voted against or individuals not coming out and voting because they are upset with the options given in representation. 

Congressional Members who participate in oversite should and need to be able to ask some of the questions in that were stated in the letter as it help educate them on policy decisions. However, if the OCC rescinded the letters it could case quite the chaos as who would the banks end up listening to? Both the OCC and the Fed are instrumental in American finance regulation but when offered two different sets of rule choosing one of the other is not ideal. Also if these banks are already working with crypto funds what are they supposed to do? With this also being unanswered it really leaves the banks out to dry. Knowing this it is highly doubtful that the OCC will do anything once the Senate returns from recess. 

Please know I am not a financial advisor and make sure you do your own research! If you enjoyed this article and would like to further support me below are a few referral links that if you used when signing up I would appreciate it! Also, follow me on Twitter @Cje95_

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