By Hassan Mehmood (Saudi Arabia)
After getting a signal from the US banks watchdog, officials of major banks show a positive response but they have demanded clear regulatory policy about cryptocurrency from the US government.
The Office for the Comptroller of the Currency (OCC) released a letter last month in which the US Regulator has allowed the banks to offer crypto-assets custody services for customers. But executives of banks as well as cryptocurrency businesses have some doubts and need clarification from OCC in cryptocurrency regulation.
Authorization of Services
Coinbase’s vice president Juan Saurez said,” Although these services, such as borrowing, lending and remittances, are permissible activities for national banks, there remains some uncertainty as to whether the provision of these services using cryptocurrencies is authorized.”
The chief digital officer at U.S. Bank National Association, Dominic Venturo, states that the US regulators should keep in mind the “expectations for services conducted on distributed ledger technology.” He further explains that uncertainty about the decision will not enable banks and investors to invest.
Also read:“U.S. Bank does not have a position on the role that cryptocurrency should undertake in the financial services sector, but merely seeks additional regulatory clarity to service the cryptocurrency market as it is currently structured or may be structured in the future.”
“Risk-Based Approach”
Steven Van Wyk, head of technology and innovation at PNC Bank says that the Office for the Comptroller of the Currency must encourage banks to follow a “risk-based approach.” He further stated:
“All banking activities (including deposit-taking and lending) involve risk, and the implementation of new technologies … necessarily will involve some degree of risk. A supervision framework that is focused only on preventing risk will, almost by necessity, prevent responsible innovation and the implementation of new technologies by national banks.”
Peter Van Valkenburgh, the director of research at Coin Centre said while referring to banks:
“They should perform heightened due diligence on any payments their customers initiate or receive if either the amounts involved are substantial or a suspicious pattern of behavior has emerged with respect to several smaller transactions.”
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