Regulations Clarified on US Banks’ Activities with Crypto Currencies
The OCC (Office of the Comptroller of the Currency), the largest US banking regulator, has provided new guidance for US banks to use public blockchains and dollar stablecoins as a settlement infrastructure in the US financial system. This is an important step in the merge of traditional banking processes and structures with distributed ledger technology.
Federally regulated banks can use dollar stablecoins to conduct payments and other activities, the Office of the Comptroller of the Currency (OCC) said Monday, January 4th, 2021.
The Office of the Comptroller of the Currency (OCC) today published a letter clarifying national banks’ and federal savings associations’ authority to participate in independent node verification networks (INVN) and use stablecoins to conduct payment activities and other bank-permissible functions.
Basically, the OCC has green-lighted national banks to run distributed ledger nodes and stablecoin networks. This is a critical step toward modernizing the payment and investment infrastructure of the US, which today represents a highly fragmented and inefficient maze of legacy systems.
“While governments in other countries have built real-time payments systems, the United States has relied on our innovation sector to deliver real-time payments technologies. Some of those technologies are built and managed by bank consortia and some are based on independent node verification networks such as blockchains,” said Acting Comptroller of the Currency Brian P. Brooks. “The President’s Working Group on Financial Markets recently articulated a strong framework for ushering in an era of stablecoin-based financial infrastructure, identifying important risks while allowing those risks to be managed in a technology-agnostic way. 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.”