Warren’s letter urges the OCC to work with the Fed and FDIC to develop an alternative approach to cryptocurrency “that adequately protects consumers and the security and soundness of the banking system.”
US Senator Elizabeth Warren is continuing her anti-crypto campaign, this time proposing legislation that would effectively shut down the cryptocurrency services provided by banks, according to a Bloomberg report on Thursday.
To move Wall Street away from the cryptocurrency market, Senator Warren, who sits on the Senate Banking Committee, is urging committee members and senators to sign a letter to the Office of the Comptroller of the Currency (OCC) asking banks to stop. the provision of cryptographic services such as the safekeeping of cryptocurrencies. The Banking Committee believes that by issuing cryptocurrency guidelines, regulators are allowing Wall Street banks to enter the market and put the banking system at risk.
The letter urges the OCC to work with the Federal Reserve and Federal Deposit Insurance Corp. (FDIC) to develop an alternative approach to cryptocurrency that adequately protects consumers and promotes “the safety and soundness of the banking system”: ”
“We are concerned that the OCC has not adequately addressed the shortcomings of previous letters of interpretation and the risks associated with cryptocurrency banking, which have deteriorated in recent months.”
The final version of the letter will be sent to OCC interim controller Michael Hsu. The OCC’s response to Bloomberg’s investigation made reference to controller Michael Hsu’s recent remarks regarding banks’ increased involvement in cryptocurrency, demonstrating the agency’s desire to change cryptocurrency banking guidelines. Hsu has called for more caution regarding the spread of cryptocurrency in traditional financial systems. The recent cryptocurrency turmoil has led to the loss of billions of dollars in investments, prompting lawmakers and regulators to increase their focus on cryptocurrency-related services.
According to Warren’s letter, the OCC’s previous instructions and rules were not enough to protect the financial system from the recent volatility of cryptocurrencies. It requires changes and removal of cryptocurrency guidelines to prevent banks from getting involved in cryptocurrencies. The document also seeks information on the current number of regulated banks providing cryptocurrency-related services, as well as the total dollar value of the services provided.
As the letter has not yet been made public, it is not known which senators signed it. However, Senator Warren has been a vocal critic of cryptocurrencies and has previously called for more regulation in the space.
He called decentralized finance (DeFi) “the most dangerous part” of cryptocurrencies in 2021 and proposed legislation to research the role of cryptocurrencies in ransomware, while criticizing the Ethereum network for its expensive fees during the attacks. He is therefore not surprising that he took the opportunity to argue in favor of stricter rules.