The U.S Office of the Comptroller of Currency (OCC) has issued an interpretive letter that allows banks to leverage stablecoins and independent node verification networks (INVNs) in their operations. This comes as the price of Bitcoin hovers past the $30,000 mark, while Defi blue chips make All-Time highs (ATH); will it be enough to keep the bulls running?
From a fundamental perspective, this development is more of a bullish signal given the history of U.S authorities with crypto. Now that the OCC has given a green light to stablecoin use, U.S banks will be able to use stablecoins such as the USDC to settle payments as well as issue their own. According to Reuters which first reported the news, U.S banks will also be exposed to public blockchains as an alternative to traditional ecosystems such as SWIFT.
While the U.S has often been branded as hostile to crypto, the latest interpretive letter by the OCC is an indicator that the free world is still conscious about the developments in this space. The OCC letter reads,
“The changing financial needs of the economy are well-illustrated by the increasing demand in the market for faster and more efficient payments through the use of decentralized technologies, such as INVNs, which validate and record financial transactions, including stablecoin transactions.”
With former Coinbase exec Brian Brooks at the helm, OCC has been quite active in the crypto scene over the past few months. One of the major developments in 2020 was the permission for banks to act as crypto custodians; a decision that was later followed by several clarification requests from industry stakeholders. Well, it seems that both the regulator and financial institutions are past this and now looking towards the integration of traditional finance and crypto ecosystems.
Moving forward, U.S banks will be able to execute transactions on-chain and save time lost in settlement lags. Circle CEO Jeremy Allaire who tweeted on the significance of this milestone, particularly noted that the USDC stablecoin is likely to benefit from the OCC decision. He went on to mention that it is a step forward by the regulator,
“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.”