The Bank Policy Institute, which represents Wall Street heavyweights including JPMorgan Chase, Goldman Sachs, and Citigroup, is mulling a lawsuit against the Office of the Comptroller of the Currency over its push to hand federal banking charters to crypto and fintech firms.
Banks reportedly say the OCC's reinterpretation allows firms to operate with bank-like powers without the full regulatory burden that traditional lenders face.
"The incumbents' lawsuit talk is less a principled objection to bringing crypto under supervision and more a protest against a two-tier system where newcomers enjoy a clean, modern charter while legacy institutions remain shackled to every bolt-on rule written since the 1930s," Joshua Chu, a lawyer and co-chair of the Hong Kong Web3 Association, told Decrypt.
Chu warned the U.S. approach to crypto bank charters could strain regulatory oversight and damage credibility if global standards are not incorporated, saying the move risks “hard-wiring tomorrow’s enforcement and credibility crisis into today’s chartering decisions.”
“It is ironic that for decades the U.S. has leveraged AML rules, dollar dominance, and its grip on correspondent banking to strong-arm other jurisdictions into tightening their regimes under the banner of FATF ‘best practice,’” he said. “Yet FATF mutual evaluations have repeatedly flagged U.S. deficiencies, and that gap is increasingly being seen as a strategic risk to its financial reputation and leverage.”
Pointing to the collapses of FTX and Celsius in 2022, the ABA warned the OCC to "be patient, not measure its application decisioning progress against traditional timelines."
Decrypt has reached out to the BPI and the OCC.
