The Office of the Comptroller of the Currency (OCC), the US Treasury Department bureau charged with regulating banks, announced that banks may now use stablecoins and blockchains for payments.
Brian Brooks, the acting comptroller of the Currency and a former Coinbase executive, indicated in a press release that the move is about leveraging the cryptocurrency industry to keep measure:
The letter makes it clear, noting that banks face competition to move funds quickly. INVNs, like blockchains and other distributed ledger technologies, are driving the funds efficiently in the OCC’s opinion.
Furthermore, the letter says that banks may issue stablecoins for they might debit cards or checks and then exchange them for fiat. The OCC makes it sound tolerable:
Jeremy Allaire, co-founder, and CEO of Circle, which operates the USDC stablecoin, struck a more emphatic note. He tweeted;
Although the OCC has taken a pro-crypto stance regarding financial innovation, its latest memorandum comes among the regulatory uncertainty for the crypto industry.
In December, a separate bureau of the US Treasury, the FinCEN, proposed rules requiring money services businesses, including banks and crypto exchanges, to record and report cryptocurrency transactions to secured wallets that meet a certain dollar threshold. The period for public comment ends today.
While the proposed FinCEN rules would not be mutually exclusive of the OCC rules issued today, it does indicate the air of uncertainty, mostly because of the unveiling of the Stablecoin Tethering and Bank Licensing (STABLE) Act last month.
That bill would regulate stablecoin operators like banks. Rep. Tlaib and other representatives have taken issue with Brooks’ management of the OCC, writing in a letter that he placed “excessive focus on crypto assets and crypto-related financial services.”
Maxine Waters, the House Financial Services Committee Chair, sent a separate letter to President-elect Joe Biden last December, asking him to appoint officials at the OCC who will keep an adequate separation between banks and Fintech companies. One recommendation she gave was to rescind OCC guidance that allows national banks to take custody of cryptocurrencies for their clients, a rule that is built upon.