January 5, 2021: America Wins Big on OCC Stablecoin Announcement 🇺🇸🎆

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Exciting news for American innovation, as Comptroller Brian Brooks of the USOCC released forward-thinking guidance allowing banks to connect with public and private blockchain nodes, as well as using stablecoins as settlement infrastructure. As detailed in the interpretive letter:

“Industry participants recognize that using stablecoins to facilitate payments may combine the efficiency and speed of digital currencies with the stability of existing currencies.”

Despite America’s leading role in building out the cryptocurrency landscape, some government entities had pushed talent and innovation overseas with a traditionally hostile regulatory posture. The USOCC announcement allows not only existing innovators to push forward, but levels the playing field to allow banks and existing financial entities to participate.

Jeremy Allaire @jerallaire

1/ Breaking major news from US Treasury OCC, the largest US banking regulator (@USOCC), with new guidance allowing US banks to use public blockchains and dollar stablecoins as a settlement infrastructure in the US financial system.

occ.govFederally Chartered Banks and Thrifts May Participate in Independent Node Verification Networks and Use Stablecoins for Payment Activities …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.

It’s worth highlighting the pedigree of Brian Brooks, who led Coinbase’s legal team before his current role. Some have criticized Coinbase’s role within the US cryptocurrency ecosystem, but without their front-line work fighting for a legal framework for digital currencies, this decision would likely have not been possible.

While it remains to be seen exactly how TradFi institutions will respond, most expect this will fuel the push for Central Bank Digital Currencies (CBDCs).

T @TorayKortan

So the OCC says banks can conduct payments with stablecoins. Banks will very likely use CBDC's, hence the stronger push of the CBDC agenda since COVID. USDT now becomes a threat. Banks/governments don't like threats & competitors. What happens if USDT gets regulated? 🤷🏻‍♂️

Over 80% of central banks have already been researching digital currencies, so this could trigger a rush to see who is first to launch their own cryptocurrencies. How CBDCs could fit into the existing ecosystem will be interesting to watch unfold, as could the role of governmental adoption.

Of course, such regulatory guidance is always at risk of being undermined by changing political tides. In addition to risks from prosophobic legislation like the STABLE Act, we also have an incoming president who’s held bizarre anti-encryption stances in the past. Fortunately, the more entities who stand to profit, the more stakeholders who are likely to argue to preserve the freedom to innovate.

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