Controversial Anti-Bitcoin OCC Candidate Pulls Out

By  //  March 24, 2022

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Saule Omarova, the controversial and anti-bitcoin candidate, nominated for the presidency of the US Office of the Comptroller of the Currency (OCC), has withdrawn after fierce resistance. It is now waiting for a new candidate. Last year, the bitcoin community www.cryptolina.com/ celebrated the appointment of Brian Brooks as Acting Comptroller of the Currency. The OCC is the regulatory body that regulates banks in the United States.

Brooks previously served as Chief Legal Officer at the bitcoin exchange Coinbase, and during his tenure, he made an effort to provide clarity to banks regarding bitcoin. Last year, for example, he let us know in a letter that banks may offer bitcoin management services and that they may also participate in the Bitcoin network. Since then, several American banks have started offering bitcoin services.

Omarova’s Nomination

However, this year, President Biden nominated Saule Omarova as the new Comptroller of the Currency candidate. So for a moment, it seemed that a change, of course, was looming. But, unlike Brooks, Omarova is not a fan of digital currencies such as bitcoin.

According to her, these would threaten financial stability and mainly benefit the existing ‘dysfunctional financial system’. Her concerns seemed to be mainly related to the possibility of digital currencies “big tech” taking over the payment infrastructure.

When asked about her stance on bitcoin, Omarova said: “I am not a Bitcoin expert, but I would be concerned if all our financial transactions rest on a blockchain system involving various actors who may be in other countries, which are not very friendly towards us, have control over the functioning of that system. That is my concern”. Instead, she feels more for a centralized central bank digital currency.

Controversies and Resistance

Omarova’s nomination was controversial, not just because of her stance on bitcoin. Omarova has quite radical ideas. For example, she stated that she wants to end traditional banking as we know it and replace it with a centralized central bank system. She also said she wants to see traditional oil companies go bankrupt because of the climate problem.

Critics, especially from the Republican side, pointed out that Omarova grew up in the former Soviet Union. They also accused Omarova of trying to disguise her dissertation on Karl Marx. Texan pro-bitcoin Senator Ted Cruz tweeted and called for the nomination to be thwarted. Senator Cynthia Lummis from Wyoming, also a bitcoin supporter, expressed concern.

Unsustainable

As a result of the resistance, Omarova has now withdrawn as a candidate. In her own words, her nomination had become untenable. Nevertheless, President Biden accepted the decision with some reluctance. He defended Omarova’s choice in an official statement, stating that Omarova had been the target of “inappropriate and personal attacks” since the nomination.

In the same statement, President Biden said he is continuing his search for a suitable candidate and will announce more about it soon. The wait is now for the new candidate, with hopefully more moderate stances on bitcoin.

2021 US Regulation decision

Earlier in January 2021, the USA regulator allowed Banks to participate in the Bitcoin network. The US government body regulating banks, the Office of the Comptroller of the Currency (OCC), said in January 2021 that US banks are allowed to contribute in ‘independent node verification networks’. It seems to state that banks can use Bitcoin for transactions and run a Bitcoin node. In addition, banks can also accept the use of stablecoins.

According to the leading crypto trading app, the excellent news follows shortly after other less rosy news about US regulations. In the same year, the American Financial Crimes Enforcement Network (FinCen) announced that it plans to introduce strict regulations that require American Bitcoin companies to carry out extensive identity checks. The proposed US rules are similar to those recently introduced in the Netherlands.

The sector has been critical of the Dutch regulations and the American proposal. According to opponents, the far-reaching Know-Your-Customer measures are neither proportional nor efficient. Moreover, ordinary consumers, in particular, pose privacy risks and create unnecessary barriers to using bitcoin.

On the other side of the line, the OCC seems to lower the banking sector’s barriers. For possible mutual payment transactions between banks, regulations about extensive verification are probably no objection and may even be desirable.