US chartered banks can now facilitate stablecoin payments and create their own
By Inkarias - 2021-01-06
Earlier this week , the official OCC or Office of the comptroller of the currency shared that national banks and federal savings associations can now finally integrate and use public blockchains and stablecoins for settlement. This statement was included and formulated into an interpretive letter which states that that banks and savings associations can now run crypto nodes and utilize associated stablecoins for permissible payment activities. This means banks can use public blockchains to validate, store, record and settle payment transactions as long as they're compliant with existing laws for according jurisdiction. This evolution is a great step to offer crypto to everyone across the US via easier systems than what is already existing on the market. This new facility will bring more customers on board in the market while mitigating costs for transactions. Blockchain as a new solution to replace old financial value-storing systems is considerably cheaper , quicker to operate and more efficient overall. By bringing blockchain in banks daily operations , the different entity will be able to issue stablecoins if wanted while greatly empowering the possibilities for investors.
The regulator indicated that:
Likewise, a bank may use stablecoins to facilitate payment transactions for customers on an independent node verification network, including by issuing a stablecoin, and by exchanging that stablecoin for fiat currency.Just as banks may buy and sell ESV as a means of converting the ESV into dollars (and vice versa) to complete customer payment transactions, banks may buy, sell, and issue stablecoin to facilitate payments. For example, one entity (payer) may wish to remit a payment of U.S. dollars to a second entity (payee). Rather than using a centralized payment system, the payer converts the U.S. dollars to stablecoin and transfers the stablecoin to the payee via the INVN. The payee then converts the stablecoin back into U.S. dollars. In one common version of this fact pattern, the payment is a cross-border remittance