The U.S. Treasury Department allows banks to use stablecoins, or help encrypted payments become mainstream?
Source: decrypt.co
Source: decrypt.co
Summary:
Summary:
The OCC is an independent agency of the U.S. Department of the Treasury.
The OCC has issued guidance stating that banks can use blockchain networks and stablecoins to facilitate payments.
The OCC has come under scrutiny from some lawmakers for its pro-encryption outlook.
The U.S. Treasury Department’s Office of the Comptroller of the Currency (OCC), which oversees banks, said banks may use stablecoins and blockchain for payments.
In an explanatory letter dated January 5, 2020, the OCC clarified that as long as the law and good banking practice are followed,"image description
Screenshot of explanation letter issued by OCC
Brian Brooks, a former Coinbase executive and head of the U.S. Office of the Comptroller of the Currency (OCC), said in a press release that the move is to use the cryptocurrency industry to keep up: “While other governments have built real-time payment systems, but the United States has always relied on our innovation sector to provide real-time payment technology.”
The letter of explanation dated January 5, 2020 clearly states that, as financial intermediaries, banks face competition in expediting the flow of funds. In the eyes of the OCC, INVN, like blockchain and other distributed ledger technologies, is an efficient and accelerated way to move funds.
Additionally, the letter states that banks can issue stablecoins in the same way they issue debit cards or checks and exchange them for fiat currency. The OCC makes it all sound good: "Banks have long used cashier's checks, travelers checks, and other bearer instruments as a means of facilitating cashless payments.
Jeremy Allaire, co-founder and CEO of Circle, which operates the USDC stablecoin, was even more emphatic, tweeting: “Big win for cryptocurrencies and stablecoins.”
He added: “We are on a path where all major economic activity is executed on-chain. It is astounding to see such forward-looking support from the largest national banking regulator in the US.”
While the Office of the Comptroller of the Currency (OCC) has taken a staunchly pro-crypto stance on financial innovation (as it has repeatedly emphasized in its letter), its latest letter comes against a backdrop of regulatory uncertainty for the cryptocurrency industry of.
In mid-December, the Financial Crimes Enforcement Network (FinCEN), an independent division of the U.S. Treasury Department, presented a proposed rule that would require money services businesses, including banks and cryptocurrency exchanges, to trade cryptocurrencies after reaching a certain threshold. Amounts need to be recorded in private cryptocurrency wallets and reported to FinCEN. The public comment period for this rule, which included federal holidays, closed on January 5, 2021.
While the proposed FinCEN rules are by no means mutually exclusive to the published OCC rules, they do demonstrate general uncertainty attributed to the release of the Stablecoin Network Sharing and Bank License Enforcement Act early last month.
The Stablecoin Network Sharing and Bank License Enforcement Act, introduced in the U.S. House of Representatives by Rep. Rashida Tlaib, would regulate stablecoin operators such as banks. Rep. Tlaib and other representatives have been skeptical of Brooks’s OCC stewardship, with Rashida Tlaib writing in a November letter that he is “overly focused on crypto assets and Financial Services Related to Crypto".
House Financial Services Committee Chairwoman Maxine Waters sent a separate letter to President-elect Joe Biden in December asking that the OCC appointed by Biden Officials need to draw a clearer distinction between banks and fintech firms. One of her proposals was to remove OCC guidance that would allow national banks to hold cryptocurrencies for their customers.
