The highest banking regulator in the United States announced that the National Bank and Savings Association of the United States can use public blockchains and stablecoins for payment activities. Experts say this is good for Bitcoin and its importance cannot be underestimated.
Banks can use public blockchains and stablecoins
The Office of the Inspector General of Currency (OCC) issued an explanatory letter on Monday, “clarifying the authority functions of the National Bank and the Federal Reserve Association to participate in the Independent Node Verification Network (INVN) and use stablecoins for payment activities and other banks’ permissions. “The OCC supervises nearly 1,200 national banks, the Federal Savings Association and the federal branches of foreign banks. These banks are engaged in approximately 70% of the banking business in the United States.
“Although the governments of other countries have established real-time payment systems, the United States still relies on our innovation department to provide real-time payment technology,” explained Brian Brooks, a currency agency agent. “Some of these technologies are built and managed by a consortium of banks, and some are based on independent node verification networks, such as blockchain.”
He continued: “The President’s Financial Markets Working Group has recently clearly proposed a strong framework to usher in an era of stablecoin-based financial infrastructure.”
Our letter eliminates any legal uncertainty regarding the legal authorization of banks authorized as validator nodes to connect to the blockchain, thus representing an increasing demand for speed, efficiency, interoperability and low cost associated with these products Of customers make stable currency payments.
The OCC letter concluded that “The National Bank or the Federal Reserve Association can verify, store and record payment transactions by acting as a node on INVN.” In addition, “Banks can use INVN and related stablecoins for other permitted payment activities. When deploying these technologies, banks must comply with applicable laws and safe, reliable and fair banking practices.”
The crypto community widely welcomes this OCC clarification. Dan Held, head of growth at Kraken, a cryptocurrency exchange, commented: “The OCC will allow Bank of America to use public blockchains and stablecoins as settlement infrastructure in the US financial system… This is of great significance to Bitcoin. As Unchanged SoV, it has settled more than one trillion dollars in value every year.”
Circle CEO Jeremy Allaire emphasized: “This is a huge victory for cryptocurrencies and stablecoins.”
The new interpretative letter stipulates that banks can treat public chains as infrastructure similar to SWIFT, ACH, and Fedwire, and treat stablecoins (such as USDC) as electronic stored value. The importance of this cannot be underestimated.
He believes: “Decentralized, unlicensed, open source and Internet-mediated software has actually become the foundation of the U.S. financial system and the global economy.” “This also runs blockchain nodes for more regulated financial institutions. It even laid the foundation for being a validator.”
What do you think of this new OCC clarification? Let us know in the comments section below.
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