Banking

In a first, OCC grants federal charter to crypto firm

WASHINGTON — The Office of the Comptroller of the Currency granted a national trust charter to the digital asset platform Anchorage, the first approval of its kind for a cryptocurrency company.

The conditional approval for Anchorage Digital Bank, which up to now has operated as a state-chartered trust based in South Dakota, will enable the company to more easily partner with banks that want to provide clients with custody services for their stablecoins and other cryptocurrency assets.

Anchorage’s trust charter does not require approval by the Federal Deposit Insurance Corp. since the company does not plan to accept deposits.

The OCC has attempted to clarify in a series of interpretive letters that existing rules allow banks to provide custody services for cryptocurrency assets. But the charter approval offers more regulatory clarity for Anchorage and its partner banks, said Diogo Mónica, the company’s co-founder and president.

A national trust charter “really puts us on par with other national banks from a regulatory perspective,” said Mónica in an interview. “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.”

A national trust charter “really puts us on par with other national banks from a regulatory perspective,” said Diogo Mónica, the co-founder and president of Anchorage.

But now, “there’s not even a question of what the regulatory regime is and how it actually works,” he added. “We are on par with other national banks.”

Anchorage is not the only cryptocurrency company interested in an OCC charter. About a month after Anchorage filed its application with the OCC in November to convert to a national trust charter, two other cryptocurrency firms filed applications of their own: Paxos, the company that runs the cryptocurrency exchange iBit, and BitPay, a crypto-payments processor.

The OCC approval marks a significant step in efforts by acting Comptroller of the Currency Brian Brooks to clarify the regulatory outlook for the use of digital assets in the final days of the Trump administration. Brooks reportedly plans to step down from the agency as early as this week.

“This is a very big step in institutions having clarity around the status of businesses and products in cryptocurrencies,” Mónica said. He pointed to the flurry of interpretive letters issued by the OCC in recent months, which he said were critical in clarifying the agency’s stance on custody issues related to digital assets and cleared the way for Anchorage to secure a national charter.

“What this means is that the acceptance and the clarity that came from interpretive letters now has an actual solution input,” Mónica said.

Anchorage, founded in 2017, is one of several cryptocurrency exchanges and platforms that offer users the ability to store digital assets, such as Bitcoin.

The company pioneered a novel system of digital asset management that stores “keys” — the passcodes that customers must use to access their digital assets — online through a mix of multi-party, multi-factor authentication, advanced fraud detection and specialized hardware.

Mónica said Anchorage has “billions of dollars under management and hundreds of clients” but he declined to provide specific figures, citing client confidentiality.

He said that the digital bank’s model is focused on forming partnerships with other banks to help them provide their customers with custody services for digital assets.

Georgia Quinn, general counsel of Anchorage, praised the OCC for taking initiative on providing regulatory clarity.

“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. “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.”




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