One Major Step Closer To Mass Adoption
Right in accordance with our forecast that 2021 will be a tremendous year for cryptocurrency building into the next 4-year cycle high due in December, the U.S. Treasury of the Office of the Comptroller of the Currency (OCC) has just announced that national banks and federal savings associations can treat public blockchains as infrastructure similar to SWIFT, ACH and FedWire. In addition, stablecoins like USDC can be used as electronic stored value as well as a payment method.
The significance of this is simply astounding.
This places blockchain and cryptocurrencies on a path towards all major financial and economic activity being executed on-chain. It is extremely encouraging to see such forward thinking support from the largest regulator of national banks in the United States.
The new guidance from the OCC provides assurance for banking institutions:
WASHINGTON—The Office of the Comptroller of the Currency (OCC) today published a letter clarifying national banks’ and federal savings associations’ authority to participate in independent node verification networks (INVN) and use stablecoins to conduct payment activities and other bank-permissible functions.
“While governments in other countries have built real-time payments systems, the United States has relied on our innovation sector to deliver real-time payments technologies. Some of those technologies are built and managed by bank consortia and some are based on independent node verification networks such as blockchains,” said Acting Comptroller of the Currency Brian P. Brooks. “The President’s Working Group on Financial Markets recently articulated a strong framework for ushering in an era of stablecoin-based financial infrastructure, identifying important risks while allowing those risks to be managed in a technology-agnostic way. Our letter removes any legal uncertainty about the authority of banks to connect to blockchains as validator nodes and thereby transact stablecoin payments on behalf of customers who are increasingly demanding the speed, efficiency, interoperability, and low cost associated with these products.”
The agency letter concludes a national bank or federal savings association may validate, store, and record payments transactions by serving as a node on an INVN. Likewise, a bank may use INVNs and related stablecoins to carry out other permissible payment activities. In deploying these technologies, a bank must comply with applicable law and safe, sound, and fair banking practices.
You can read the full statement here.
After years of patience, 2021 could very well be the year of celebration in the world of crypto.