The Office of the Comptroller of the Currency (OCC) of the United States has officially given permission to national banks for providing services to stablecoin issuers in the United States. In an interpretation letter that published on Monday, September 21, 2020, the US banking regulator clarified that National Banks as well as Federal Savings Association Authority may hold reserves for stablecoin issuers.
First regulatory guidance for stablecoins issued by OCC
US OCC along with the Securities and Exchange Commission (SEC) has released the first regulatory guidance for stablecoins in which it explains how national banks can treat fiat currencies-pegged stablecoins such as USD Coin, Gemini Dollar, Tether (USDT), and some others. In the letter, the banking regulator said, “a national bank may hold such stablecoin ‘reserves’ as a service to bank customers.”
Brian Brooks, the Acting Comptroller of the Currency, said that various national banks are already engaged in activities related to stablecoins and this official clarification given by the OCC will provide them with great regulatory certainty. Brooks said:
“National banks and federal savings associations currently engage in stablecoin related activities involving billions of dollars each day. This opinion provides greater regulatory certainty for banks within the federal banking system to provide those client services in a safe and sound manner.”
The letter that was signed by Jonathan Gould the Senior Deputy Comptroller particularly stated that stablecoins should be pegged one-to-one to a fiat currency.
Furthermore, the letter stated:
“We understand that some stablecoin issuers may desire to place the cash reserves backing their issued stablecoin with a national bank. In the most basic example, a stablecoin issuer may seek to place its reserve funds in a deposit account with a national bank. National banks are expressly authorized to receive deposits. Receiving deposits is recognized as a core banking activity.”
For several years, US banks have been providing services to stablecoin issuers but in a not-cleared regulatory environment. However, the OCC has given them the green light so that they can feel free to offer their services to stablecoin issuers.