The OCC provided conditional approval for “trust” bank charters to five crypto companies, including Ripple and Paxos. These approvals bring crypto and all its risks into the banking system on a large scale and allow these crypto banks to apply for accounts at the Federal Reserve and use its payments system.

The OCC issued an Interpretive Letter that confirms banks can broker crypto in so-called “riskless principal crypto-asset transactions.” Despite the name, these transactions are not “riskless.” Crypto assets are extremely volatile, and they introduce huge operational risks.

The Commodity Futures Trading Commission initiated a pilot program that for the first time allows merchants to use crypto and stablecoins as collateral under CFTC supervision. The fact that crypto tokens and so-called stablecoins are so often volatile and unstable makes them unsuitable for collateral where the CFTC has recognized that collateral should be able to maintain its value during times of stress.

In an updated Bulletin, the OCC rescinded existing guidance that set strong risk management expectations on commercial loans to companies in an early, expansion, or late stage of corporate development, “venture loans.” The elimination of the guidance will allow banks to engage in riskier venture lending behavior and endanger the safety and soundness of the US financial system.

The OCC and FDIC announced their withdrawal of 2013 guidance that set strong risk management expectations for banks when lending to heavily- indebted companies. The elimination of the guidance will allow banks to engage in riskier leverage lending behavior and endanger the safety and soundness of the US financial system.

The Commodity Futures Trading Commission announced that listed spot crypto products will begin trading for the first time on CFTC-registered futures exchanges. The CFTC did not specify what rules or investor protections would apply to the trading of spot crypto products.

Read Better Markets’ statement here.