The Office of the Comptroller of the Currency (OCC) is one of the not-so-glamorous federal agencies.
However, the office has gained new prominence in recent years because of the questions on how to integrate fintech and cryptocurrency firms into the banking system. Now there is a silent fight on who should lead it.
And a week ago, it seemed like Michael Barr, a Treasury official from the Obama-era, was to be named as the Biden Administration’s pick to be the head of the OCC.
The move has been hailed by many in the crypto industry, who believed his background would mean Barr would continue the crypto-friendly policies of former OCC head, Brian Brooks. Although the others complained that Barr appeared to be too cozy with the fintech industry:
And now, hopes for Barr’s confirmation have been dashed.
Last week, Bloomberg reported that the Biden White House has “all but ruled out” naming Barr. On the other hand, American Bankers suggested that Barr’s appointment had been torpedoed by Biden’s progressives allies who were frustrated with the President’s failure to name one of their own to be on top Cabinet slot. The publication then added that the new favorite to lead the OCC is Mehrsa Baradaran, an academic “outsider” who has made her name publishing books articles talking about racial injustice in the US banking system.
The appointment of Baradaran, who would be the first woman of color to lead the OCC, would be a victory for progressives. But it could also trigger anxiety and uncertainty in the crypto sector.
A Washington insider stated that Baradaran will be an unpopular choice in the crypto circles, part of it is because she has spoken skeptically about Bitcoin in the past.
For example, in a testimony to Congress in mid-2019, Baradaran likened Bitcoin to tulips, South Sea stocks, and other bubble-prone assets. She then observed that many Bitcoin boosters are opposed to the regulation, citing an academic paper that described the politics of Bitcoin as “right-wing extremism.”
“While I share many of the cryptocurrency industry’s concerns with respect to failures of the banking industry, I do not believe cryptocurrency is the best solution to the problems of financial inclusion and equity in banking,”
stated Baradaran during the Senate Committee on Banking, Housing and Community Affairs.
“With millions underbanked or underserved, we look forward to engaging with OCC leadership to take a proactive approach, and develop a coherent, forward-looking framework that ensures consumer protections, while driving innovations that will ultimately deliver access to safe, inclusive, low-cost, and equitable products and services,”
Milan Dalal, Senior Government Relations Advisor for the FTA
When Baradaran is then picked to lead the OCC, the appointment will not necessarily be bad for crypto. Her initial priorities will likely involve expanding access to the financial system, and guard against racism in banking and lending services – priorities that will lead her to focus on traditional banks than the crypto sector.
Although the OCC’s prominent initiatives in Brooks’ tenure included issuing interpretive letters, involving one clearing the way for banks to use stablecoins in their operations. Under Brooks’ management, the OCC also granted a first-of-its-kind conditional trust charter to the crypto custody service, Anchorage – effectively blessing it as a federal bank. Baradaran could be unlikely to roll back Brooks’ initiatives.
The source also expressed hope that the Biden Administration will select a different dark horse to lead the OCC in the form of California state regulator, Manny Alvarez – a name that is also in the options for the American Banker piece.
It has been reported last Monday that the Administration was “close” to naming Baradaran, the specific timeline for an OCC appointment is still unclear, it means that it could be weeks before a formal announcement, which normally made it a lower priority for incoming Presidents.
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