The office of the comptroller of the Currency (OCC) is an independent bureau of the US Treasury Department which is charged with the responsibility of regulating banks. In an interpretive letter issued on 5th January 2021, the OCC has issued guidance stating that US banks may use blockchain and stable coins to facilitate payments.
The letter states that national banks and saving institutions in the US can serve as a node on the Independent Node verification Network (INVN), or else known as the blockchain network to validate, store and record transactions. Similarly, banks may also use stablecoins to conduct other permissible payment activities.
The acting comptroller of the currency Brian Brooks has made the statement highlighting that unlike other countries, the US has relied on private sectors to crate real-time payment solutions and technologies. The letter also places blockchain technology in status adjacent to SWIFT, ACH, and Fedwire. Hence, seemingly endorsing blockchain technology as an alternative to other pre-existing real-time payment systems.
Following the release of the letter from the OCC, the cryptocurrency market has reacted positively. Ethereum prices have rallied by 12% and Bitcoin prices jumped by 5%. Managing Partner at Blockhead Jeremy Yashouafar has shared that integration of public blockchain and stablecoin into the traditional banking system is positive news for investors. While, Jeremy Allaire, co-founder and the CEO of the Circle has hailed the recent move by OCC “As a Huge win for crypto and stablecoins.”
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