Last night it was officially announced that acting Comptroller of the Currency Brian Brooks is stepping down today (14 January 2020) after eight months in the role. He joined the agency as Deputy Comptroller in April 2020 after serving as Chief Legal Officer of Coinbase for 19 months. The new acting Comptroller is the current Chief Operating Officer Blake Paulson, who first joined the OCC in 1986.
Earlier this week, Brooks penned an opinion piece in the Financial Times. He urged regulatory clarity for decentralized finance (DeFi), what he termed ‘self-driving banks’ or DeFi apps that take deposits, grant loans, and process payments. He suggested that laws might be revisited to enable the grant of national banking charters to open source software that lacks identifiable officers. Those ‘antiquated rules should be revisited,’ he said.
Previously Brooks made clear that he believes the deposit-taking function of incumbent banks will not survive blockchain decentralization.
Under Brooks’ short tenure, he had a big impact on the digital asset space. Members of Congress expressed displeasure noting the OCC’s limited statutory authority and asked for more Congressional consultation. One group introduced the STABLE bill to limit stablecoin issuance to banks.
Last week, the OCC published an interpretive letter allowing banks to participate in stablecoin networks. This follows previous letters paving the way for banks to custody digital assets and hold stablecoin reserves.
Another area is the grant of bank charters to cryptocurrency and blockchain firms. Just yesterday, the OCC gave conditional approval for cryptocurrency custody firm Anchorage to receive a federal trust bank charter. Figure Technologies also applied but has not yet received approval and is getting significant incumbent pushback. The Conference of State Bank Supervisors has sued the OCC, claiming that a national banking license grant to Figure without FDIC insurance is beyond the OCC’s authority.