An influential lobby group of major American banks is investigating whether to go to court against an important financial regulator. The reason is a series of new banking licenses for companies in the crypto sector. According to the banks, this could put pressure on the stability of the financial system.
BitGo, Ripple and Paxos receive preliminary approval
The possible lawsuit is aimed at the Office of the Comptroller of the Currency (OCC), the American regulator that can issue national banking licenses. Since December, the OCC has provisionally approved several national trust bank licenses for crypto companies.
BitGo, Fidelity Digital Assets, Ripple and Paxos, among others, received such conditional approval. In February, companies such as Crypto.com, Bridge and Stripe were added. Other parties are also trying to obtain such a license.
According to a report from The Guardian, the Bank Policy Institute (BPI) is now considering legal action because the regulator is said to have ignored warnings from the banking sector.
Concerns about supervision
The Bank Policy Institute represents some of the largest financial institutions in the United States. Its members include Goldman Sachs, American Express and JPMorgan.
The organization fears that crypto companies with a national trust bank license will receive less strict supervision than traditional banks. According to the lobby, this could pose risks to customers and possibly also to the broader financial system.
A national trust bank license is a federal license that allows companies to operate as trust banks. This allows them to offer services such as asset management for third parties, custody of assets and other trust services.
Such a license is attractive for crypto companies. It provides access to a national banking structure without all the rules that apply to a fully commercial bank.
More requests expected
Interest in this permit is growing rapidly. For example, blockchain infrastructure company Zerohash filed an application with the OCC at the end of February.
The Donald Trump-backed World Liberty Financial also applied for a license in January. The company wants to expand the use of its stablecoin USD1, but is still waiting for a decision.
The banking lobby has not yet made a final choice about a lawsuit. According to sources, legal options are currently being investigated.
Source: https://newsbit.nl/grote-amerikaanse-banken-dreigen-met-rechtszaak-om-crypto-banken/
