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OCC Allows Regulated Banks to Use Stablecoins as Payment Method

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Regulated financial institutions can participate as nodes on the blockchain and can store stablecoins or verify payments.

Rhythm BlockBeats news, on January 5, the U.S. Office of the Comptroller of the Currency (OCC) stated that federally regulated banks can use stablecoins for payments and other activities.

Federal Banking Regulator Issues Explanatory Letter on Whether National Banks and Federal Savings Associations Can Participate in Standalone Nodes Validation Networks (INVNs, aka blockchain networks) or use stablecoins. The letter makes it clear that these financial institutions can participate as nodes on the blockchain, storing or verifying payments.

However, the OCC warned in a press release that any bank participating in the INVN must be aware of the to operational, compliance or fraud risks. INVNs “may be more resilient than other payment networks” due to the large number of nodes required to verify transactions, thereby limiting tampering, the OCC said.