In an unexpected announcement, the U.S. Office of the Comptroller of the Currency (OCC) revealed that banks will be able to use stablecoins and public blockchain networks.
In a letter that addressed several national banks, the federal banking regulator notes that they could participate as nodes in public blockchains and support stablecoin payments.
The event marks one of the most important events in cryptocurrency history, with several implications on the industry’s evolution.
Briefly summarized, U.S. financial institutions now have the ability to freely and legally participate in blockchain networks. Not only can they verify transactions, acting as nodes, they can also facilitate stablecoin transactions. OCC’s new legal framework provides a settlement infrastructure for cryptocurrencies in the United States.
The so-called ‘interpretive letter’ establishes that banks can treat public blockchain networks as infrastructure similar to SWIFT. Moreover, stablecoins can serve for storing electronic value which represents the first institutional use case of digital crypto cash.
However, the OCC warns that banks should be aware of all the operational, fraud, and compliance risks when participating in Independent Node Verifications Networks (INVNs). Despite these warnings, the federal regulator claims that INVNs “may be more resilient than other payment networks.”
The Acting Controller of the Currency, Brian Brooks, subsequently compared the progress made by the U.S. compared to other nations. While countries such as China relied on building their own real-time payments systems, the United States relied on the private sector.
His statement indicates that this may be in fact the country’s official policy. Instead of developing its own solutions, the leading economy can utilize the entrepreneurial skills of its citizens.
How the OCC blockchain decision might impact crypto
Commenting on the event, Circle’s CEO Jeremy Allaire stated “this is a huge win for crypto and stablecoins.” Amazed by what the decision brings for the future, Allaire added:
Decentralized, permissionless, open source and internet mediated software is literally becoming the foundation for not just the US financial system but for the global economy. We are on a path towards all major economic activity being executed on-chain. It is tremendous to see such forward thinking support from the largest regulator of national banks in the United States.
According to the CEO, the decision will impact leading-dollar digital currencies like the USDC, turning it into a mainstream payment medium.
In another segment, the decision will also help the U.S. embrace public blockchains. If banks truly make cryptocurrencies mainstream, the United States may become the blockchain’s industry leader.
Apart from one small price pump, Bitcoin and other cryptocurrencies have not reacted to the news in any significant way. As a matter of fact, the leading cryptocurrency has once again tapped $30,000 and may now continue to fall further.
Crypto Twitter’s sentiment is that a lack of reaction may display weakness for current price levels. Famous trader SalsaTekila commented that this is the most bullish news that he has ever seen in this whole rally. In his opinion, Bitcoin may form a top for January if we do not see any noteworthy pump.