The US Treasury decided to allow blockchains and stablecoins to facilitate bank payments by issuing an interpretative letter that is aimed to help make crypto payments mainstream. Let’s find out more in today’s crypto news.
The OCC is an independent bureau of the US Treasury which was actually the body that will allow banks to use blockchains and stablecoins when making payments. The OCC came under scrutiny from some legislators for its pro-crypto outlook. The Office of the Comptroller of the currency is charged with regulating banks but now stated that banks could use stablecoins and blockchains for payments.
It seems that the US Treasury decided to allow banks to have more freedom when it comes to stablecoins and blockchains according to the interpretative letter issued today. The OCC clarified that as long as it complies with the law and the banking practices “a national bank or federal savings association may validate, store, and record payments transactions by serving as a node on an INVN [independent node verification network]. Likewise, a bank may use INVNs and related stablecoins to carry out other permissible payment activities.”
Acting Comptroller of the Currency Brian Brooks who is a former Coinbase Executive, outlined in a press release that the move is about leveraging the entire crypto industry to keep pace:
“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.”
The letter made it clear that the financial intermediaries like banks, face competition to move funds faster. INVNs such as blockchains and other DLT options are a much more effective way of moving funds. The letter states that banks could issue stabelcoin as they do with debit cards or checks and exchange them for fiat. the OCC made it clear that “Banks have long used casheirs’ checks, travelers’ checks, and other bearer instruments as a means of facilitating cashless payments.”
Jeremy Allaire who is a co-founder and CEO of Circle tweeted:
“This is a huge win for crypto and stablecoins. We are on a path towards all major economic activity being executed on-chain. It is tremendous to see such forward thinking support from the largest regulator of national banks in the United States.”
1/ Breaking major news from US Treasury OCC, the largest US banking regulator (@USOCC), with new guidance allowing US banks to use public blockchains and dollar stablecoins as a settlement infrastructure in the US financial system. https://t.co/gQFWISWUnc
— Jeremy Allaire (@jerallaire) January 4, 2021
Back in December, the Financial Crimes Enforcement Network proposed new rules requiring money services businesses including banks and exchanges to record and to report crypto transactions to private wallets if they meet the dollar threshold.
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