US Regulator OCC Proposes ‘Fair Access’ to Banking Services For All Including Crypto Companies

The Office of the Comptroller of the Currency (OCC), the US’s national bank regulator, has proposed a rule that would forbid banks from providing their services to legal industries, including cryptocurrency companies.

As per the proposed rule, led by former Coinbase counsel Brian Brooks, fair access is promoted under which financial services could be denied by banks to customers only on the basis of “quantitative, risk-based standards established in advance.”

They can’t do so due to political pressures, to prevent the customer from entering or competing in a market or to benefit another person or business activity.

Published on Friday, the proposal does not explicitly mention cryptocurrency but is surely welcoming news for the industry, which has been time and again denied the services by the banks.

The proposal does mention Operation Choke Point, an initiative taken by the Justice Department under the Barack Obama presidency that reportedly aimed to shut down the fraudulent businesses and lenders.

It further reads that it has been revealed that the government agencies have pressured banks to sever their financial services access to “disfavored (but not unlawful) sectors of the economy.”

But neither OCC nor banks are well-equipped to balance these risks that are unrelated to the financial exposure, it said.

Marco Santori on US OCC
Source: @MSantoriESQ

“Fair access to financial services, credit, and capital are essential to our economy,” said Acting Comptroller of the Currency Brian P. Brooks.

“This proposed rule would ensure that banks meet their responsibility to provide their services fairly since they enjoy special privilege and powers because if the system fails to provide fairness to all, it cannot be a source of strength for any.”

The proposal is open for public comments until January 4, 2021.

This week, President Donald Trump nominated the acting Comptroller Brooks as the permanent head of the OCC, a five-year stint.

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Author: AnTy

Will China’s CBDC See Strong Adoption Or Will Dollar Pegged Stablecoins Cause Resistance?

China’s digital yuan is touted as a powerful challenger to the US’s global dollar dominance, but not as a direct competitor to cryptocurrencies. However, Chinese central bank digital currencies (CBDC) may find it hard to see adoption in niches where the dollar-pegged stablecoins already have a foothold, primarily Tether’s USDT.

Speaking during the Unitize panel held on Monday, Genesis Block’s Charles Yang, gave reasons why digital yuan might not be attractive as a crypto replacement.

Speaking to Bitcoin Exchange Guide, Yang explained that there are two main aspects driving crypto adoption in Asia. First, speculation, stating that there is a large number of investors particularly from China and Korea who like taking risks. In addition, Asian traders also enjoy the borderless nature of cryptos. He explained:

“Any country that has these capital constraints — Korea is a big one, China’s obviously another major one — [where] people just can’t go through regular banking channels to send money to a different country. This is the major use case of crypto right now.”

In this regard, Yang argues that a centralized as well as bank-issued digital yuan might not be a superb replacement to USDT. Yang states that the set regulations for capital control will still apply.

Yang also brought the issue of internationalization of CBDC’s and the way other nations may react. He explained that if China introduces a digital yuan within their own blockchain insisting other nations to accept it, those nations will need to access the data. Yang remains sceptical on whether the Chinese central bank will be ready to offer the data to other nations.

Yang stated that USDT will remain to be popular in Asia as lots of dollars are being traded each day. Traders’ confidence has been boosted in the recent past in regards to its reserves.

The expert opines that digital yuan will need to establish itself among bigger crypto markets as well as exchanges for it to compete with USDT.

Lack of adoption by other countries can also make it hard for the digital yuan to have a major threat to USDT.

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Author: Joseph Kibe

INSTEX Now Operational, Could Trigger Trump & Bitcoin

INSTEX Now Operational, Could Trigger Trump & Bitcoin
  • SWIFT US’s tool to sanction war, now bypassed by EU and Iran
  • EU mechanism to trade with Iran by evading US sanctions process first transactions
  • Long Bitcoin, short the “US monetary hegemony”

A special trade vehicle designed to allow limited trade between the EU and Iran is now up and running, that will avoid sanctions from the United States.

Following a meeting of the six world powers and Iran to the 2015 nuclear deal that the US abandoned last year, European External Action Services said that this vehicle is operational, in a statement on Friday.

“France, Germany and the United Kingdom informed participants that INSTEX had been made operational and available to all EU member states and that the first transactions are being processed,” reads an excerpt of the statement published on the official website of the European Union.

The EU pledged to accelerate the cooperation with the Iranian corresponding entity (STFI) as well.

Bitcoin and Cryptocurrencies Could Play a Role Here

When first announcing the creation of the INSTEX in January, the EU said it would be “focusing initially on the sectors most essential to the Iranian population — such as pharmaceutical, medical devices, and agri-food goods.” However, this is far from the inflow of foreign trade promised by the JCPOA.

INSTEX basically provides a mechanism for EU companies to pursue transactions with Iran outside of Swift, avoiding the US sanctions and financial systems.

This system can also accelerate a broader acceptance of cryptocurrency in Iran, as previously reported.

The system is aimed at reducing the amount of cross-currency transactions and when too many imports are placed in Europe relative to export orders into Iran, Bitcoin here can play a role in direct currency exchanges that is central bank to central bank.

Iran already has a high interest in cryptocurrency as the government legalized Bitcoin mining in the country. Moreover, LocalBitcoins officially shut off its service for Iran-based users because of rising rial trading volume on the platform, US sanctions being the likely cause.

Iran even proposed state backed cryptocurrency to evade the sanctions.

INSTEX to Trigger Trump

The instrument in Support of Trade Exchanges (INSTEX) is aimed at facilitating trade with Iran by circumventing the sanctions imposed by the US after President Donald Trump pulled out of the 2015 nuclear deal last year and now wants a new agreement.

Though calling the meeting “positive” Iranian Deputy Foreign Minister Abbas Aragchi said:

“it is still not enough and it is still not meeting Iran’s expectations.”

The 2015 nuclear deal known as the Joint Comprehensive Plan of Action (JCPOA) was the product of extensive diplomacy between Iran and the US and China, Germany, France, Russia, the UK, and the EU. Under the terms of this deal, Iran agreed to curb its nuclear activities in exchange for billions, which was opposed by Republicans and some US allies in the Middle East.

“Long bitcoin. Short US monetary hegemony,” responded a Bitcoin enthusiast to this news.

USA used SWIFT as a tool in its sanctions war and now Europe has developed INSTEX to bypass SWIFT. This will not only trigger Trump but will have geopolitical implications as well.

Back in May, Sigal Mandelker, Treasury Department’s undersecretary for terrorism and financial intelligence warned that anyone associated with it will have to face “severe consequences” and further “loss of access to the U.S. financial system.” Geopolitical tensions will only further lead people to Bitcoin.

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Author: AnTy