OCC Leader Claims Democrats Are the Sole Political Influence in World Liberty Charter Decision
The regulator dismissed allegations that he is acting on behalf of President Trump during a congressional hearing that also discussed the GENIUS Act stablecoin initiative.
What to know:
— The House Financial Services Committee conducted a hearing with banking regulators that explored stablecoin regulations and the contentious bank-charter application from World Liberty Financial, the cryptocurrency firm associated with President Donald Trump and his family.
— Jonathan Gould, the head of the Office of the Comptroller of the Currency, refuted claims that he is doing Trump’s bidding regarding the charter application and stated that the only political pressure he faces on this issue is from Democrats.
— The head of the Federal Deposit Insurance Corp. indicated that another stablecoin proposal involving customer-identification programs is forthcoming.
The cryptocurrency firm linked to President Donald Trump, World Liberty Financial Inc., was once again under political examination during a congressional hearing in which the head of the U.S. Office of the Comptroller of the Currency indicated that the only political influence his agency feels regarding its decision on whether to grant the firm a bank charter comes from Democrats, rather than Trump.
Comptroller of the Currency Jonathan Gould’s response came after Representative Gregory Meeks, a Democrat from New York, queried during the Thursday hearing whether Gould is «serving the American people or acting as a Trump fixer, which is it?»
«The only political pressure I have felt from anyone outside of your Senate colleagues is from your attempts to keep pressuring me,» Gould remarked, referencing similar inquiries from Democrats including Senator Elizabeth Warren. «That is very unfortunate and unprecedented,» he continued, asserting that his agency will fulfill its duties in accordance with the statute governing charters.
Democrats continue to assert that World Liberty’s links to foreign investors and crypto partners previously associated with illicit activities — including global exchange Binance — imply that it is unqualified for a U.S. banking charter, and they have claimed it is inappropriate for a Trump appointee to determine whether to grant such a benefit to a business partially owned by the president and his family.
During the verbal exchanges on Thursday, Gould asserted that his agency is adhering to ethical regulations in the application for a national trust-bank charter for World Liberty Trust Company.
The Trump-associated business is also a stablecoin issuer, a primary subject of the House Financial Services Committee hearing, where U.S. banking and credit union regulators discussed their progress on implementing the Guiding and Establishing National Innovation for U.S. Stablecoins (GENIUS) Act.
Regulators have already proposed several rules to implement the new law, and Federal Deposit Insurance Corp. Chairman Travis Hill announced that another proposal is imminent, indicating that his agency and others will soon propose a rule mandating «customer identification programs» for stablecoin issuers «in the very near future.»
Kyle Hauptman, chairman of the National Credit Union Administration, praised the growth of stablecoins in the U.S. during his testimony.
«As stablecoins become more widely accepted, Americans may no longer be ridiculed for discussing how many ‘business days’ a payment will take to settle. With stablecoins, every day is a business day,» he remarked. «Tax refunds might eventually be received on Sundays or holidays. And if we were to experience another pandemic like COVID in March 2020, Americans should be able to receive emergency stimulus funds more promptly and securely.»
However, Representative Brad Sherman, a Democrat from California who frequently warns about the dangers of cryptocurrency, stated, «I can’t think of a worse idea» than permitting government payments in stablecoins. «It would legitimize an alternative to the U.S. dollar, an alternative designed to enable a tax-evasion economy.»
Sherman also contended that the GENIUS Act «requires that no interest be paid on stablecoins,» and he argued that «the smartest, or at least the best-compensated lawyers in the country» are devising methods to circumvent that restriction, necessitating that regulators create regulations that can withstand such challenges.
During the hearing, a lawmaker inquired of Federal Reserve Vice Chair for Supervision Michelle Bowman regarding the Fed master account awarded to crypto exchange Kraken.
Bowman explained that the approval granted only «very limited access to the payments system» and was initially limited to a duration of 12 months, during which she stated the Fed would be closely monitoring it to prepare for formal regulations regarding such accounts. The broader cryptocurrency sector is also highly interested in the results of the Fed’s policy development on granting such access to the central bank’s payments system and services, commonly referred to as «skinny» master accounts.