US’s Regulator of Financial Institutions announces change of policy. Allows banks, semi-banks as well as saving associations to utilize services of public blockchains for sending and receiving funds. Also gives permission to use stablecoins for the purposes of payments. Experts suggest that this would indirectly benefit Bitcoin and expect Bitcoin’s value will surge more.
A self-explanatory note has been published on Monday by the Office of Comptroller of the Currency (OCC) which highlights a change in banking policy. In the note, OCC has allowed financial institutions, semi-banks as well as saving associations within the US to seek services of public blockchains. The Office had also permitted them to use stablecoins.
It was pointed out that permission had been granted to these institutions for sending and receiving payments. However, OCC had further clarified that these institutions can use only those stablecoins which had been duly approved by the Securities & Exchange Commission.
In fulfillment of this objective, OCC had also directed banks/federal-chartered saving associations to ensure participation in Independent Node Verification Networks (INVN). There had been around some 1,200 banks/federal-chartered saving associations which are under the supervisory control of OCC within the US. Approximately 70% of the business conducted by these banks/federal-chartered saving associations is done within the jurisdiction of the US.
Brian Brooks, OCC’s Acting Comptroller suggested that the US had adopted innovation that is 100% owned by the US for the purposes of payments. However, the rest of the world had been working on an in-built payment mechanism. But their payment mechanisms had been built by someone else or a mix of multiple systems.
The note also suggested that the banks/federal-chartered saving associations had been authorized to conduct transactions through INVN. Furthermore, the banks could also acquire stablecoins to conduct any and all valid and authorized actions. However, the banks/federal-chartered saving associations had been advised by OCC to ensure compliance of the relevant laws and rules.
The change of policy by OCC was later on appreciated within the crypto industry. Dan Held of Kraken (a crypto exchange turned into a financial institution) termed the initiative of OCC as the need of the hour. He commented that Bitcoin would be benefitted further when the banks/federal-chartered saving associations would be using stablecoins as well as blockchain. He also said that he was now expecting a further surge in the value of Bitcoin.
Meanwhile, Jeremy Allaire of Circle – issuer of USDC – also commented on the recently published note of OCC. He said that allowing the banks to use blockchain networks as payment mechanisms such as SWIFT etc. cannot be underestimated. This is a huge thing and the permitted institutions should be thankful to OCC, stated Allaire.
Allaire stated further that the stage had now been set for banks/federal-chartered saving associations to adopt blockchain technology and take benefit from it.