The Office of the Currency Controller (OCC) said Monday that federal regulated banks can use stable coins to carry out payments and other activities.
The federal banking regulator has published a letter of interpretation in which the question of whether national banks and federal savings societies can participate in independent node verification networks (INVNs, also known as blockchain networks) or use stablecoins. The letter states that these financial institutions can participate as nodes on a blockchain and store or validate payments.
A press release from OCC warned that any banks that do participate in an INVN should be aware of the operational, compliance or fraud risks.
The OCC nevertheless said INVNs “are more resilient than other payment networks” because of the large number of nodes needed to verify transactions, which in turn can limit tampering.
Kristin Smith, executive director of the Blockchain Association, said on Twitter that “the letter states that blockchains have the same status as other global financial networks, such as SWIFT, ACH and FedWire.”
Brian Brooks, the acting controller of the currency, said in a statement that although other countries had built real-time payment systems, “the US” relied on the private sector “to create such technologies, and apparently the use of crypto Currencies – specifically stable coins, endorsed. – as an alternative to other real-time payment systems.
Brooks oversaw the publication of two other letters of interpretation and a number of other crypto-friendly movements during his time overseeing the agency, including a letter stating that federal banks could provide services to issuers of stablecoin and reserves. for storing stable coins.
Last month, Brooks announced his support for a letter from the President’s Financial Markets Working Group outlining how US portfolios should be regulated.
President Donald Trump has twice nominated Brooks to serve a full five-year term as head of the agency, including earlier this week. However, it is unclear whether the US Senate will plan a confirmation vote. This is apparently from the press time probably not before the election of President Joe Biden on January 20th.
Monday’s letter of interpretation also comes on the same day as closing a public comment period for a proposed FinCEN rule for the enforcement of financial crimes. The controversial rule lasted only 15 days and was allegedly led by Finance Minister Steven Mnuchin, who appointed Brooks to the OCC in early 2020.
‘[Monday’s OCC letter] shows to show that there is no overall attack on cryptocurrencies, that there are light spots in government that realize that cryptocurrencies are going to be the foundation of future payment systems and other financial services applications, and we welcome this type of interpretation guidance, ”Smith told CoinDesk in a phone call.
Read the full letter below: