TL;DR Breakdown
- OCC says banks can now use blockchains and stablecoins for payment processes
- The crypto market has reacted positively to this new development
The Office of the Comptroller (OCC), through an interpretive letter, announced that federal banks in the country can now use public blockchains and stablecoins to process payments.
According to this letter, the OCC would allow these institutions to make use of these crypto services in as much as they meet up with the best practices of the country and also meet every regulation requirements guiding their operations. The letter added that the banks can make use of independent node verification network (INVN) —public blockchains— to make transactions effectively and quickly.
Brian Brooks, the former Coinbase Executive who is now the Acting Comptroller of the agency noted that this new development was needed as it leverages on the advancements made in the crypto industry to drive fast transaction services. He added that other countries had developed instant payment systems themselves, whereas the US is dependent on the private industry to help it build these systems through innovative technologies.
This new development is in line with the pro-crypto stance the body has taken ever since Brooks took charge of the body. The agency has made several strides in developing policies and regulations that provides an enabling environment for the growth of the crypto industry.
Stablecoins and other crypto asset reacts positively to the news
The crypto industry has had a positive response to the news that the OCC has now allowed banks to make use of public blockchain networks and stablecoins.
Ethereum and Bitcoin, the two leading crypto assets, reacted positively to the news. Ethereum’s value increased by 12% largely due to the fact that the network is being used for Stablecoin payment settlement while BTC regained 5%.
The native tokens for Stablecoin networks like Algorand and Solana have also reacted positively to the news.
Jeremy Allaire of Circle has also hailed this new development as a forward thinking approach by the regulator.
