- The Office of the Comptroller of the Currency (OCC) gave cryptocurrency platform Anchorage conditional approval Wednesday for a national trust bank charter — a first in the crypto sphere.
- The move converts Anchorage from a state-chartered trust company based in South Dakota to a federally regulated entity, easing the company's prospects of partnering with banks that want to provide users with custody services for their digital assets.
- "Whenever we're doing business with another bank, they always have to look at our regulatory regime, understand the fiduciary responsibilities, understand the local state law, understand how the assets are treated, for them to understand if they can do business with us," Diogo Mónica, Anchorage's co-founder and president, told American Banker. With federal charter approval, "there's not even a question of what the regulatory regime is and how it actually works ... We are on par with other national banks."
The OCC under Acting Comptroller Brian Brooks has taken several steps to include crypto in the national banking conversation and set boundaries for its use. The regulator issued an interpretive letter last week clarifying banks can use stablecoins to facilitate payment transactions for customers on an independent node verification network. That followed guidance from July specifying that national banks could provide cryptocurrency custody services and hold unique cryptographic "keys" associated with cryptocurrency on behalf of customers.
Brooks, a former Coinbase executive, announced his resignation from his OCC post Wednesday.
Anchorage's approval was subject to "the same rigorous review and standards applied to all charter applications," the OCC said in a press release.
"By bringing this applicant into the federal banking system, the bank and industry will benefit from the OCC's extensive supervisory experience and expertise," the regulator said in a release Wednesday. "At the same time, the Anchorage approval demonstrates that the national bank charters provided under the National Bank Act are broad and flexible enough to accommodate evolving approaches to financial services in the 21st century."
National trusts do not require deposit insurance and, since Anchorage does not plan to accept deposits, the charter doesn't need sign-off from the FDIC.
Under its agreement with the OCC, Anchorage must maintain $7 million in Tier 1 capital and must set aside at least $3 million in liquidity, or the equivalent of 180 days' worth of operating expenses.
Georgia Quinn, Anchorage's general counsel, said the charter was a win for the company and for crypto at large.
"They are embracing the fact that there is this new technology, and rather than put their head in the sand or run from it, they are regulating it," Quinn said of the OCC, according to American Banker. "They're not trying to do something nefarious with it. They're actually just embracing it and regulating it, and this is what is going to help crypto more than anything."
"What this means is that the acceptance and the clarity that came from interpretive letters now has an actual solution input," Mónica said.
Anchorage, which Mónica co-founded in 2017, uses a digital asset management system that stores customers' passcodes online through a combination of multiparty, multifactor authentication, advanced fraud detection and specialized hardware.
Brooks, in his time atop the OCC, has focused much attention on charters. He has advocated for a national charter for payments companies, claiming it was the answer to the ongoing unbundling of financial services. He also vowed to continue the legal fight over the agency's fintech charter, a proposal the OCC introduced in 2016, under former Comptroller Thomas Curry.