U.S. Bankers Association sends letter to regulators: "Delay approvals for crypto firms"

The American Bankers Association (ABA) has been confirmed to have sent a letter to financial regulators calling for delays in approvals for crypto companies.

According to industry sources on the 12th (local time), the ABA said in a letter sent the previous day (1st) to the U.S. Office of the Comptroller of the Currency (OCC) that "during the period in which the regulatory framework for stablecoins and digital assets has not been established, please slow the approval-decision process." The ABA added that "during periods of rapid innovation, it must be ensured that standards for safety and soundness that are robust and broadly applicable can be properly understood and maintained," and asked regulators to "proceed with the approval process only after waiting until each applicant’s regulatory responsibilities are clarified."

It also cited risks posed by crypto firms. The ABA said that even innovative business models—such as the 2022 bankruptcy of FTX—can fail in ways that regulators are unable to properly oversee. The ABA stated, "Please verify that existing or new applicants have sufficient custodial management capabilities to address all bankruptcy risks."

The ABA’s letter comes amid a recent dispute over interest payments on stablecoins. The U.S. banking industry and the crypto sector have continued to clash over the issue. Decrypt reported that "the U.S. banking industry recently included in a draft of the crypto market structure bill (the Clarity Act) a provision that would prohibit paying any interest or yield on stablecoin holdings," adding that "Coinbase and others have abruptly withdrawn their support for the bill."