U.S. Agencies Set to Get Even More Cautious on Crypto, Bank Watchdog Warns

(Bloomberg) -- Cryptocurrencies have faced a bumpy road to gaining acceptance from the U.S. financial system. Now, they are about to encounter a fresh obstacle with banking watchdogs set to announce an even more cautious approach to regulating digital tokens.

Michael Hsu, the acting chief of the Office of the Comptroller of the Currency, said Tuesday that federal agencies are close to releasing a joint statement describing the results of their “crypto sprint,” a review the government conducted earlier this year to get a better handle on virtual currencies. He signaled that the conclusions from the OCC, Federal Reserve and Federal Deposit Insurance Corp. would be far from industry friendly. 

“The agencies are approaching crypto activities very carefully with a high degree of caution,” Hsu said at a financial technology conference hosted by the Federal Reserve Bank of Philadelphia. 

Hsu also said that guidelines issued by the OCC at the end the Trump administration shouldn’t be interpreted as encouraging banks to get into crypto. Hsu said the OCC is poised to provide clarity on the so-called interpretive letters, which the agency put out under former acting head Brian Brooks. Brooks is a vocal backer of digital-token firms who now works in the industry. 

“The forthcoming releases will clarify that safety and soundness is paramount,” Hsu said. “We will proceed carefully and cautiously and will hold banks to the same.” 

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