The Office of the Comptroller of Currency has announced on January 4 that financial institutions like banks can now make use of stablecoins and blockchains to process payments, via a letter. The OCC informed banks that they could use these new methods as long as they comply with regulations and best banking practices in the US.
Blockchains to Help in Moving Funds Faster
The letter also stated that banks can go on to record transactions on an independent node verification network (INVN). These institutions can also use these INVNs and stablecoins to make payments.
The acting Comptroller of the agency, Brian Brooks, said in a recent press statement, that this development was needed in order to use the advancements that the crypto industry offers. According to the former Coinbase Executive, the government of the US has had to rely on the ingenuity of its innovation sector to drive instant payment technologies whereas, other countries are building up such systems from top down.
The banks would be able to use this development to move funds faster as they face competition from other financial intermediaries.
The OCC’s statement shows that they feel that blockchains can be an effective way for financial institutions to move funds between their clients. Brooks also added that banks may issue stablecoins in the same vein that they issue debit cards and checks in exchange for fiat currencies.
Jeremy Allaire, co-founder of Circle, hailed this news as a huge win for the crypto industry. According to him, having banks make use of blockchain and stablecoins as a payment process shows that the regulatory body is forward-thinking.
OCC Pro-Crypto Outlook Questioned by Congressmen
The OCC pro-crypto outlook has led to some level of consternation among some members of the US Congress.
A member of the US House of Representatives, Rep. Rashida Tlaib, and other members of the house had written to the Office of the Comptroller in November last year, where they had explicitly told the OCC that he was placing excessive attention to crypto assets and crypto-related financial services.
Another member of the house, Maxine Waters, who is the chairman of the Financial Services Committee had also written to the new President-elect asking him to make sure that the officials to be appointed into the OCC keep a distinction between banks and fintech. The House chair also went on to advise the incoming president to stop the OCC from granting banks the ability to take custody of crypto assets on behalf of their clients.
The regulatory body stance appears alien in the crypto industry as there has been a level of uncertainty, as well as strict regulations, guarding the operations of the sector.
Other federal agencies like the Financial Crimes Enforcement Network (FinCEN) had proposed strict regulatory measures for crypto firms who were looking to operate in the US market.