The U.S. Office of the Comptroller of the Currency (OCC) has published more crypto-friendly guidelines allowing greater participation by regulated financial institutions in the industry.
In a press release issued on Monday (Jan. 4, 2020), the OCC revealed its decision to allow Federally chartered banks and thrifts to utilize stablecoins and public blockchains for payment settlement and other banking functions. The OCC conveyed the news via an interpretive letter detailing all the modalities for banks participating in independent node verification networks (INVN).
According to the interpretive letter, a national bank or federal thrift association can run nodes for validating, storing, and recording transactions on public blockchain networks. The guideline also revealed that banks can use INVNs and stablecoins for payments as long as such protocols comply with existing industry best practices.
For the OCC, utilizing blockchain networks and stablecoins could serve to increase the efficiency of the federal banking architecture while ensuring payment stability. Commenting on the move, OCC acting comptroller Brian Brooks also remarked:
“Our letter removes any legal uncertainty about the authority of banks to connect to blockchains as validator nodes and thereby transact stablecoin payments on behalf of customers who are increasingly demanding the speed, efficiency, interoperability, and low cost associated with these products.”
The news fulfills an earlier promise by Brooks of incoming positive crypto regulations. As previously reported by CryptoPotato, the OCC acting chief recently declared that Bitcoin ban was not on the agenda of U.S.regulators. Back in Sept. 2020, the OCC also approved banks holding stablecoin reserves on behalf of issuers.
Monday’s new guideline by the OCC is also coming at a time when the U.S. Congress is considering legislation prescribing stricter laws for stablecoins in the country. Some Democratic lawmakers sponsored a bill clamoring for stablecoin issuers to be licensed as banks back in December, to the chagrin of many cryptocurrency stakeholders stateside.
In late Dec. 2020, a Presidential working group in the U.S. called for increased scrutiny over the stablecoin market. Outside the U.S. stakeholders in mainstream finance are also upping the ante in the efforts to create stablecoin regulations mostly driven by fear of private stablecoins upstaging government-issued fiat.