The payments landscape for community banks is changing rapidly as traditional payments converge with new instant payment systems and emerging cryptocurrencies. It is critical for Community Banks to maintain awareness of developments in the payments space to assess new opportunities, mitigate risks, and ensure that their payment strategy aligns with overall business plans.
Oct. 12, 2022
Acting Comptroller of the Currency Michael Hsu warned of risks posed by crypto-assets and laid out some of his priorities for bringing them within the regulatory perimeter.
Risk Focus: Addressing the Harvard Law School, Hsu cited key areas that need regulatory clarity, including liquidity risk management of crypto company deposits and crypto custody. He warned that crypto companies looking to celebrate interagency crypto oversight as a sign of legitimacy should “hold the champagne.”
Studying Exposures: In separate remarks at DC Fintech Week, Hsu said the OCC is considering ways to support periodic and ongoing information gathering to better understand the prevalence and scope of crypto-asset exposures and interconnectedness at supervised institutions.
New Sanctions: Also Tuesday, Treasury’s Office of Foreign Assets Control and Financial Crimes Enforcement Network announced settlements totaling $53 million with Bittrex, a virtual currency exchange, for sanctions and BSA/AML violations. It is OFAC’s largest virtual currency enforcement action to date and the first parallel enforcement actions by FinCEN and OFAC in the crypto sector.
ICBA Polling: ICBA recently released new polling conducted by Morning Consult indicating consumers support a regulatory framework for digital assets and are skeptical of the creation of a U.S. central bank digital currency.