Several well-known companies publicly pressured the US authorities to establish a national licensing system for blockchain

Following the release of the U.S. Office of the Comptroller of the Currency’s (OCC) Financial Technology Innovation Report in March, six blockchain companies and interest groups publicly submitted their perspectives on what they want to know and how they want to influence regulators’ future activities in the space.

Despite the OCC’s aggressive push for a better understanding of the blockchain industry, most respondents advocated for regulators to create a national licensing system to ease barriers to entry for startups. Industry representatives believe a way is needed to allow startups to bypass state licensing processes that are stifling domestic innovation.

This view has been echoed in various forms by a number of companies, including bitcoin exchange Coinbase, bitcoin payment app company Circle, industry interest group Coin Center and distributed ledger startup Ripple, who have all publicly expressed support.

Ryan Zagone, Ripple’s head of regulatory relations, wrote:

“Our nation’s regulatory system lacks effective national licensing options for businesses with a global reach. This lack of availability limits the ability of these companies to grow in the United States. In many cases, they choose to relocate or refocus their operations to other countries with more effective licensing systems.”

Coin Center executive director Jerry Brito and bitcoin startup Circle CCO John Beccia also echoed this view in their speeches, advocating that the OCC establish a new "federal alternative" to money transmission regulation.

Becha said:

"We believe a new federal license will spur innovation among companies and federal and state regulators."

Respondents also suggested that the OCC set up a task force or innovation office to work more directly with the financial technology industry so it could better understand the nuances of the specific technologies and business models used by various startups.

Respondents also spoke directly to the nuances of blockchain technology, which they believe has the potential to address difficulties with current regulatory regimes designed for traditional payment systems.

“Banks are denying digital currency and digital asset companies access to banking services without conducting an initial and due diligence investigation into their actual business models.”

International influence

This has become a common industry restriction, and many representatives encouraged the OCC to learn from the United Kingdom, Singapore and Australia, whose jurisdictions are more suitable for the development of innovative startups.

For example, Brito asserted that the OCC should follow the lead of the UK’s Financial Conduct Authority, which has had a positive impact on the domestic fintech ecosystem by creating an inclusive environment for development.

This view is also shared by Beccia, who believes that the OCC should follow the UK's example as Circle is the first company to receive an electronic money license from the UK government.

Beccia wrote:

“In addition to encouraging innovation within the UK, UK regulators have begun to look at international collaboration as a way to further promote innovation and help UK financial technology companies.”

Beccia went on to say that further OCC action could help restore U.S. competitiveness and "change the dynamics of financial technology."

Direct contact

Bank consortium R3CEV was an outlier in the comments, as its comments were more directly aimed at the OCC’s relationship with its current financial industry clients.

However, Charley Cooper, managing director of R3, believes the OCC should seek to work more closely with industry, such as startups.

He said:

“The OCC should consider various forms of active engagement with the private sector—both financial services firms and technology companies—to better understand and support new technologies entering the market.”

Cooper even said the OCC should consider taking action to work 'directly' with industry startups and develop internal understanding of the technology, while stressing that collaboration is necessary for all market participants to ease concerns about innovation.