Largest US Banking Regulator Allows Banks to Use Public Blockchain & USD Stablecoins for Payments
OCC giving banks the greenlight to treat public chains as SWIFT, ACH, and FedWire has the market excited, calling it a big win for crypto and stablecoins.
US Treasury OCC published new guidance on Monday that allows US banks to use public blockchain and dollar stablecoins as a settlement infrastructure in the US financial system.
The Office of the Comptroller of the Currency (OCC) is basically “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,” it reads.
As per the letter, banks can validate, store, and record payment transactions as a node or an INVN and use these stablecoins to carry out “permissible” payment activities while complying with applicable law.
According to Acting Comptroller of the Currency Brian P. Brooks, this will help in enhancing achieving real-time payments, which may even be “more resilient than other payment networks because of (INVNs’) decentralized nature.”
Still can't believe this.
US banks are now greenlighted to use and support global, non-sovereign financial infrastructure. https://t.co/tc9wjIS2UD
— Ryan Watkins (@RyanWatkins_) January 4, 2021
The crypto community celebrated this news from the largest US banking regulator. Jeremy Allaire, CEO of Circle, which created USDC stablecoin in collaboration with Coinbase, called this a “huge win for crypto and stablecoins.”
This means banks can now treat public chains as “infrastructure similar to SWIFT, ACH and FedWire, and stablecoins like USDC as electronic stored value,” said Allaire.
According to him, this paves the way for the use of USDC as a “mainstream payment medium for all forms of payments and settlement” while setting the stage for more regulated financial institutions to run blockchain nodes and even become validators.
“This is a HUGE way to start 2021, the year that crypto and stablecoins go mass market.”
— IntoTheBlock (@intotheblock) January 5, 2021
“US banks using public blockchains & stablecoins, etc. for settlement between them means banks will have to buy BTC/ETH in order to pay for their transactions … meaning banks will be helping secure those blockchains.”