Pending releases on crypto ‘sprint,’ OCC’s past letters will emphasize safety and soundness, Hsu says

If earlier agency communications have been interpreted as “tacit encouragement” for banks to engage in crypto activities, the next round of releases will clarify that “safety and soundness is paramount,” Acting Comptroller of the Currency Michael Hsu said Tuesday.

Speaking before a Federal Reserve Bank of Philadelphia fintech conference, Hsu was referring as he did in a previous speech to the communications slated to come on the now-concluded “crypto sprint” and the Office of the Comptroller of the Currency’s (OCC) review of its past letters regarding crypto services.

Hsu reiterated that the banking agencies – OCC, Federal Reserve, and Federal Deposit Insurance Corp. (FDIC) – will soon issue a “short statement” describing the crypto sprint. He said his own agency will also provide “clarity” on its recently concluded review of crypto-related interpretive letters.

”The message from both is that the agencies are approaching crypto activities very carefully and with a high degree of caution. We expect banks to do the same,” the acting comptroller said.

More pointedly, he said the releases “should not be interpreted as a green light or a solid red light, but rather as reflective of a disciplined, deliberative, and diligent approach to a novel and risky area. We will proceed carefully and cautiously and will hold banks to the same.”

Acting Comptroller Michael J. Hsu remarks before the Federal Reserve Bank of Philadelphia Fifth Annual Fintech Conference, Nov. 16, 2021, “Modernizing the Financial Regulatory Perimeter”