The Office of the Comptroller of the Currency (OCC) has become an important regulator under former Coinbase Chief Legal Officer Brian Brooks. They released Interpretive Letter 1174, about Independent Node Verification Networks (INVN or Blockchains) and Stablecoins.
The Letter states: “National banks and Federal savings associations (collectively referred to as “banks”) may use new technologies, including INVNs and related stablecoins, to perform bank-permissible functions, such as payment activities.”
Chairman Brooks may not be officially confirmed to the office under the new US government led by Joe Biden, but this letter setts an important precedent. It defines both INVN’s and stablecoins, while outlining the current banking system’s need for innovation.
With different regulatory offices trying to regulate the blockchain industry, the OCC is trying to take an important role saying, “A bank should consult with OCC supervisors, as appropriate, prior to engaging in these payment activities. The OCC will review these activities as part of its ordinary supervisory processes.”
Many on Twitter weighed in:
The OCC just told US banks that they must treat permissionless, open source blockchains like Bitcoin and Ethereum the same way they treat SWIFT, ACH and FedWire.
(@APompliano) January 4, 2021
Absolutely wild note from the OCC. Banks given authorization to treat public blockchains as another form of settlement infrastructure. I think this will be seen as a watershed moment.https://t.co/eVy3eh50fC
— nic carter
(@nic__carter) January 4, 2021
The OCC paved the way for banks to
1. Access public chains (Eth, BTC, Celo, USDC) as payments rails
2. Hold each of those coins directly or on behalf of clients
3. Run a node for each of those chains
Biggest legitimization moment of decentralized infrastructure yet
— Simon Taylor (@sytaylor) January 5, 2021