OCC to Create Office Focused on Financial Technology

The Office of the Comptroller of the Currency will establish a new office in early 2023 to adapt to the rapid changes in the financial technology sector. According to the OCC, the planned Office of Financial Technology will provide strategic leadership, vision and perspective for the OCC’s fintech activities and related supervision. It will incorporate the existing Office of Innovation, which was created in 2016 to support responsible financial innovation, the OCC said.

According to Michael Hsu, acting comptroller of the currency, the office will provide a better understanding of the fintech landscape to ensure a secure and fair federal banking system. 

At a conference organized by The Clearing House and the Bank Policy Institute in September, Hsu warned of a serious financial crisis resulting from the rising prominence of digital banking and fintech which, he said, brings more complexity and “de-integration” in the banking sector.

OCC announced the creation of the office following concerns from senators that the current OCC guidance is outdated, exposing banks to unnecessary risk. Lawmakers asked the office to update its guidance, which allows financial institutions to provide crypto custody, hold cash reserves backing stablecoins and use blockchain and stablecoins for bank-to-bank payment verification.