The Office of the Comptroller of Currency has announced that banks can now issue stablecoins in exchange for fiat currencies.
According to a letter that just emanated from the Office of the Comptroller of Currencies (OCC), banks that are regulated by the federal government can now use blockchains to process payment. And also issue stablecoins in exchange for fiat currencies.
It has become known that these financial institutions can make use of these new innovations as long as they are law abiding and also meet the best banking practice in the country. This means that the banks can make use of independent node verification network (INVN) to validate transactions on their platform.
The acting comptroller of the agency Brian Brooks, who also served as an executive of Coinbase, noted that this new development was needed by the banks in the United States so as to keep pace with the growth happening in the industry globally. Brooks also added that other countries had built systems that would aid fast-payment, the US government is instead relying on the private sector to build such systems for the country.
The new regulations would also allow the banks to be able to issue stablecoins the same way debit cards and checks are being issued. This means that clients of the banks would be able to exchange these stablecoins for fiat currencies. It also means that the banks would be able to use the crypto assets to process transactions in a faster and a more efficient way.
Crypto Industry Reacts Positively to the News from OCC about Banks
After news emerged that the OCC was going to be granting the banks the opportunity to use blockchain and stablecoins for payment purposes, the crypto industry reacted positively to the news.
OCC Has a Pro-Crypto Outlook under Brooks
Since when the former Coinbase Executive took over as the Comptroller of the regulatory body, the agency has taken a pro-crypto stance as against other regulatory bodies in the country.
Under Brooks, the agency has published two different interpretive letters that clarify some crypto policies for the banking industry. The agency has also adopted crypto-friendly regulations that have looked to make the United States receptive to the crypto industry.
Recently, the OCC told federal banks that they could now provide their services to Stablecoin issuers and also provide custodial services to these issuers. The Acting Comptroller also announced that he was in support of the President’s Working Group position on how stablecoins should be regulated in the country.
Congressmen Frown at OCC for This Stance
Different US congressmen have expressed their reservations about the pro-crypto stance the OCC has taken since Brian Brooks took helms of the affairs of the regulatory body.
The House Chairman on Financial Services Maxine Waters had written to the newly elected US President Joe Biden and advised him to appoint officials who would make a clear distinction between the banks and fintech companies. She also advised the new president to stop the OCC from granting banks the ability to grant custodial services for crypto assets.