The US Office of the Comptroller of the Currency has given the green light to national banks and federal savings institutions to use public blockchains and stablecoins for settlement. The ruling was delivered by an interpretive letter released on 4 January that clarified that national banks and federal savings institutions could participate in the market if they comply with the law, safety, and fair banking practices. The OCC notes that activities using both may be more resilient than existing payment networks.
Blockchain and stablecoins may enhance the efficiency of settlements.
The US Office of the Comptroller of the Currency reasoned that the adoption of blockchain and stablecoins might enhance the efficiency, effectiveness, and stability of payment activities and achieve the benefits of real-time payments already enjoyed in other countries. The OCC noted that activities using both might be more resilient than existing payment networks. The US regulator also warned of potential risks when using blockchains, including operation risks, compliance risks, and fraud. It also warned that banks should guard against potential money laundering activities and terrorist financing by adopting their compliance programs to ensure compliance with the reporting and record-keeping requirements of the Bank Secrecy Act.
The US regulator also allowed banks to hold cryptocurrencies earlier.
As reported earlier, the US regulator OCC gave both national banks and federal savings institutions approval to hold cryptocurrency in July 2020. In that decision, OCC stated that national banks might provide cryptocurrency services on behalf of customers, including holding cryptographic keys associated with cryptocurrency. The letter also stated that national banks could also provide permissible banking services to any lawful business they choose, including cryptocurrency businesses, if they effectively manage the risks and comply with applicable law.