Digital currency is becoming an increasingly popular way of conducting business, particularly due to the rise in contactless payments brought about by the COVID-19 pandemic. The Office of the Comptroller of Currency (OCC) has issued new guidance to ensure that financial institutions use digital currency safely. The OCC’s requirements include the need for banks to understand the risks associated with digital currency, to have an effective risk management program in place, and to ensure that anti-money laundering and consumer protection laws are followed.
Business owners should make sure they understand the OCC’s requirements and how they affect their business. Structure Law Group, LLP’s California corporate lawyers can help business owners stay compliant with the OCC’s requirements and ensure they are safely engaging with digital currency. Our highly skilled corporate lawyers can also provide advice on how to protect your business from potential risks associated with digital currency transactions. Learn more about the OCC’s requirements, what they mean for business owners.
What the OCC Rule Says
The OCC issued a press release in late 2021 clarifying its position on banks engaging in cryptocurrency transactions. The OCC allows national banks and federal savings associations to engage in activities involving cryptocurrency, distributed ledger, and stablecoin but requires an institution to prove that it has “adequate controls in place” before doing so. This proof is provided by notifying the bank’s supervisory office of its intent to engage in cryptocurrency activities. Once the supervisory office issues a written notification of its non-objection, the bank may engage in transactions involving these new forms of digital currency.
What the OCC Rule Means for Business Owners
So, what do these changes mean for companies? First, it is important to be sure that your financial institution has the required letter of “non-objection.” While this might seem like a simple bureaucratic step, it actually means that the bank has proven it has adequate controls in place to protect your money. Digital currency is not well regulated, which can make it risky, and it is important for business owners to take all sensible precautions to protect any investment involving cryptocurrency.
Second, the OCC’s decision to “sanction” digital currency creates many more options for business owners. Vendors can be paid in cryptocurrency that was received as payment from a client. Contractors and employees can also agree to be paid in cryptocurrency as part of a compensation package (or even in lieu of any other compensation at all). The OCC’s opinion is an important step toward recognizing the validity of cryptocurrency in all financial transactions. The more financial options a business has, the better it can meet the needs of its employees, customers, vendors, and even regulators. Businesses that are prepared to use new technologies will be better prepared to corner their markets in the future.
California Corporate Attorneys to Help Your Business Plan for the Future
The COVID-19 pandemic has taught us all many painful lessons. For business owners, it is important to recognize the ways the pandemic has permanently changed the worldwide financial market, for example: entire industries are moving online; workers are seeking remote positions; and customers are increasingly choosing contactless payment methods – including cryptocurrency. Businesses that are prepared to meet the changing market can take advantage of the many opportunities it presents. The experienced California corporate lawyers at Structure Law Group, LLP can help you evaluate cryptocurrency and other digital options in all of your company’s financial transactions. Call (408) 441-7500 to schedule a consultation or contact us online.