President Donald Trump-linked crypto company World Liberty Financial Inc. came under political scrutiny again during a congressional hearing in which the head of the U.S. Office of the Comptroller of the Currency suggested that the only political pressure his agency felt over its decision whether to give the company a banking charter came from Democrats, not Trump.
Comptroller of the Currency Jonathan Gould’s rebuttal came in response to Rep. Gregory Meeks, a New York Democrat, who asked during Thursday’s hearing whether Gould “works for the American people or works as a Trump fixer, which is it?”
“Your attempts to continue to pressure me are the only political pressure I have felt from anyone other than your colleagues in the Senate,” Gould said, referring to similar questions he had heard from Democrats, including Sen. Elizabeth Warren. “This is very regrettable and unprecedented,” he added, insisting that his agency will do its work within the framework of the statute governing charters.
Democrats continue to argue that World Liberty’s ties to foreign investors and crypto partners that have previously been associated with illicit behavior — including global exchange Binance — suggest it’s not a fit for a U.S. banking charter, and they argued it was inappropriate for a Trump appointee to decide to grant such a benefit to a company partly owned by the president and his family.
Amid Thursday’s verbal sparring, Gould said his agency followed ethics laws in seeking a national trust bank charter for the World Liberty Trust Company.
The Trump-linked company is also a stablecoin issuer, which was a central topic of the House Financial Services Committee hearing, in which U.S. banking and credit union industry supervisors explained where they stood in implementing the Guiding and Establishing National Innovation for American Stablecoins (GENIUS) Act.
Regulators have already released several proposed rules to implement the new law, and Federal Deposit Insurance Corp. Chairman Travis Hill said another would be available soon, saying his agency and others would propose a rule requiring “customer identification programs” for stablecoin issuers “in the very near future.”
Kyle Hauptman, president of the National Credit Union Administration, touted the rise of stablecoins in the United States in his testimony.
“As stablecoins become more widely adopted, we Americans may no longer be ridiculed for talking about how many ‘business days’ it will take to settle a payment. Every day is a business day with stablecoins,” he said. “Tax refunds could potentially arrive on Sundays or holidays. And if we ever see a repeat of the COVID outbreak in March 2020, Americans should be able to receive emergency stimulus funds faster and more securely.”
But Rep. Brad Sherman, a California Democrat who regularly speaks out against crypto’s risks, said, “I can’t think of a worse idea” than allowing government payments in stablecoins. “This would enshrine an alternative to the US dollar, one designed to facilitate a tax avoidance economy.”
Sherman also argued that the GENIUS Act “requires that no interest be paid on stablecoins,” and he argued that “the smartest, or at least the highest paid, lawyers in the country” are trying to find ways to evade this ban, so regulators need to “write regulations that resist that.”
Also during the hearing, a lawmaker questioned Michelle Bowman, vice chair of supervision at the Federal Reserve, about the Fed’s main account granted to crypto exchange Kraken.
Bowman said the approval granted only “very limited access to the payment system” and for an initially narrow duration of 12 months, during which time the Fed would monitor it closely to prepare for formal rules for opening such accounts. The rest of the crypto industry is also keenly interested in the results of the Fed’s policy work to open up such access to the central bank’s payment system and services, commonly referred to as “skinny” master accounts.
Read more: US Senator Warren pushes back against World Liberty Bank charter delay due to Trump ties
