The crypto firm linked to President Donald Trump, World Liberty Financial Inc., was again the focus of political scrutiny in a congressional hearing, with the head of the US Office of the Comptroller of the Currency suggesting that the only political pressure his agency feels on its decision to grant the firm a bank charter or not comes from Democrats, not Trump.
Comptroller of the Currency Jonathan Gould’s rebuttal came in response to Representative Gregory Meeks, a New York Democrat, who asked during Thursday’s hearing whether Gould is “working for the American people or working as a Trump fixer, which is it?”
“Your attempts to continue to pressure me is the only political pressure I’ve felt from other than your colleagues in the Senate,” Gould said, referring to similar questions he had heard from Democrats, including Sen. Elizabeth Warren. “It’s very unfortunate and unprecedented,” he added, insisting his agency will do its job according to the statute governing the charters.
Democrats continue to argue that World Liberty’s connection to foreign investors and crypto partners previously linked to illegal behavior — including global exchange Binance — suggests it is unfit for a U.S. banking charter, and they have argued that it is inappropriate for a Trump appointee to decide whether to give such a benefit to a company partially owned by a company partially owned by his family.
Amid Thursday’s verbal sparring, Gould said his agency is following ethics laws in applying for a national trust bank charter for World Liberty Trust Company.
The Trump-affiliated business is also a stablecoin issuer, which was a key topic in the House Financial Services Committee hearing, where US regulators for the banking and credit union industry explained where they are in implementing the Guiding and Establishing National Innovation for US Stablecoins (GENIUS) Act.
Regulators have already issued several proposed rules to put the new law in place, and the chairman of the Federal Deposit Insurance Corp. Travis Hill said another is coming soon, and says his agency and others will propose a rule requiring “customer identification programs” for stablecoin issuers “in the near future.”
Kyle Hauptman, chairman of the National Credit Union Administration, touted the U.S. rise of stablecoins in his testimony.
“As stablecoins become more widespread, we Americans may no longer be ridiculed for talking about how many ‘business days’ a payment will take to process. Every day is a business day with stablecoins,” he said. “Tax refunds may ultimately arrive on Sundays or holidays. And if we ever have a repeat of the March 2020 COVID outbreak, Americans should be able to receive emergency stimulus funds in a more timely and secure manner.”
But Representative Brad Sherman, a California Democrat who routinely rails against the risks of crypto, said, “I can’t think of a worse idea” than allowing public payments in stablecoins. “It would sanctify an alternative to the US dollar, an alternative designed to facilitate a tax avoidance economy.”
Sherman also argued that the GENIUS Act “requires that no interest be paid on stablecoins,” and he claimed that “the smartest or at least the highest paid lawyers in the country” are trying to figure out ways around this ban, so regulators need to “write rules that resist it.”
Also at the hearing, a lawmaker asked Federal Reserve Vice Chair for Supervision Michelle Bowman about the Fed master account assigned to crypto exchange Kraken.
Bowman said the approval provided only “very limited access to the payments system” and for an initially narrow 12-month duration, during which she said the Fed will watch it closely to educate itself in preparation for formal rules for providing such accounts. The rest of the crypto industry is also very interested in the outcome of the Fed’s political work to open such access to the central bank’s payment system and services, commonly known as “skinny” master accounts.
Read more: US Senator Warren recused herself over World Liberty bank charter delay over Trump ties
