Federally Directed Banks Can Utilize Stablecoins for Payments

January 5, 2021

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The Office of the Comptroller of the Currently stated on Monday, federally directed financial institutions can utilize stablecoins to process payments and other activities. The federal banking regulator published an analytical letter addressed if federal savings associations and national banks can utilize stablecoins or partake in independent node verification networks, INVNs also called blockchain networks. Such banks can partake as nodes on blockchain and validate or store payments, the letter stated.

Any banks that do take an interest in an INVN should know about the operational, consistence, or misrepresentation chances while doing as such, an OCC public statement cautioned. Kristin Smith, chief head of the Blockchain Association, said on Twitter that the letter expresses that blockchains have similar status as other worldwide monetary organizations, for example, SWIFT, FedWire, and ACH.

Brian Brooks, the Acting Comptroller of the Currency, stated that while different countries have fabricated constant payments frameworks, the U.S. has depended on the private area to make such advancements, apparently supporting the utilization of cryptographic forms of money explicitly stablecoins as an option in contrast to other real-time payment frameworks.

A month ago, Brooks declared his support of a letter by the President’s Working Group on Financial Markets that sketched out how stablecoins ought to be controlled inside the U.S. President Donald Trump has twice designated Brooks to serve an entire five-year term heading up the organization, including recently. In any case, it’s hazy whether the U.S. Senate will plan an affirmation vote.

Monday’s interpretive letter likewise goes ahead the exact day as a public remark period for a proposed Financial Crime Enforcement Network (FinCEN) rule closes. The dubious standard just had a 15-day remark period and has purportedly been initiated by Treasury Secretary Steven Mnuchin, who designated Brooks to the OCC in mid-2020.

Image Courtesy : Pixabay

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