With Acting Comptroller Brooks on his way out the door, the OCC has given its first digital bank charter.
Custody pioneer Anchorage is the first crypto firm to see a charter from the U.S. national bank regulator.
Per a Wednesday announcement from the Office of the Comptroller of the Currency, Anchorage will have conditional authorization to operate as a trust institution nationally. The charter is the first of its kind, part of an idea of a “fintech charter” stretching back to the Obama years, but which has been accelerated under the leadership of Acting Comptroller Brian Brooks, formerly of Coinbase’s legal team.
Per the announcement, Anchorage’s continued charter will hinge upon unique requirements:
“As an enforceable condition of approval, the company entered into an operating agreement which sets forth, among other things, capital and liquidity requirements and the OCC’s risk management expectations.”
The actual agreement between Anchorage and the OCC specifies a point that has been central to the debate around the fintech charter; namely, that the new species of banks will not hold deposits: “The Bank shall not engage in activities that would cause it to be a “bank” as defined in section 2(c) of the Bank Holding Company Act.”
It’s a controversial point. What is a bank? With the advent of online banking and especially with the technological security that crypto provides, Brooks believes that the future belongs to more bespoke financial services. Narrower uses more tailored to individual needs, but still requiring national authorization, as he described his vision earlier today.
In the same interview, Elliptic CEO Simone Naimi asked Brooks when to expect the first such national charter for a crypto bank. Brooks checked his watch, in what at the time seemed to be jest.
Hitherto, such registration has been done state-by-state, but only recently for crypto. This past summer, Wyoming authorized Kraken as the first crypto-native bank in the U.S.
Nonetheless, state regulators have expressed concern that the OCC’s push to charter non-depository institutions represents a threat to their authority.
An OCC representative declined to comment as to whether to expect more crypto bank charters in Brooks’ final days as Acting Comptroller.