US federal regulator says banks can now not only act as nodes in blockchain networks, but also make payments in stablecoins.
December 15, 2020 | AtoZ Markets – The Office of the Comptroller of the Currency (OCC) has authorized US financial institutions to use blockchain infrastructure to process stablecoin payments. This was reported in a press release from the OCC.
OCC allows US banks to make stablecoins payments
In particular, the regulator allowed US banks to take part in an independent verification of the nodes of blockchain networks, as well as use stablecoins to conduct payment and other banking operations. Now, a national bank or federal savings association can verify, store, or record payment transactions, acting as a validator on the blockchain network.
The regulator expects that the entry of financial institutions into the blockchain industry will increase the efficiency, effectiveness, and stability of payment activities. For example, OCC expects to increase the sustainability of payments compared to other payment networks.
The use of the blockchain, the regulator writes, also reduces the risk of falsification or adding inaccurate information to the database, since information is added only after a consensus is reached between the verifying nodes.
However, the regulator stressed that banks should be aware of the potential risks when using blockchain, including operational difficulties, compliance, and fraudulent schemes.
Brian Brooks, head of the OCC and former legal counsel for cryptocurrency exchange Coinbase, said that with the ruling, the OCC wanted to remove any legal uncertainty regarding the authority of banks to connect to blockchains.
For the benefit of regulation
However, in the US, there is still tension in the legislative field around the regulation of the virtual assets market. A bill was presented in the United States in early December, requiring issuers of stablecoins to obtain permission for their activities from banking regulators.
In mid-December, the United States proposed to introduce mandatory verification of cryptocurrency wallets. In particular, it is proposed to apply advanced verification methods of the wallet owner in case of withdrawal of funds in the amount of more than $3000.
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