The Office of the United States Comptroller of the United States (OCC) has released new guidance that formally clarifies that national banks can provide services to US stablecoin issuers, CoinDesk reports.
The Securities and Exchange Commission (SEC) and the Office of the Comptroller of the Currency (OCC) released the stablecoin guidance on Monday, which provides the first detailed national guidance on how cryptocurrencies backed by fiat currencies should be treated in accordance with the law. Prior to these clarifications, there was no federal clarity regarding stablecoins.
“Issuers of stablecoins have been using US banks for years, but in an unclear regulatory environment. The OCC now wants federally regulated banks to feel comfortable providing services to stablecoin issuers, ”the press release said.
A cover letter signed by Senior Deputy Comptroller Jonathan Gould explains that while banks must conduct due diligence and provide a risk assessment of the banking services of any stablecoin issuer, such coins are becoming increasingly popular.
The letter states that this applies to stablecoins backed on an individual basis with fiat currencies.
“National banks and federal savings associations currently engage in billions of dollars in stablecoin activities every day. This view provides more regulatory confidence for banks within the federal banking system to provide services to these customers in a secure and reliable manner, ”said Acting Comptroller Brian Brooks.
Jeremy Aller, CEO of Circle, a member of CENTER, said in March that USDC issuers are currently required to work with reserve banks, and each member has an account with those banks.
“I cannot speak on behalf of other stablecoins, but at CENTER we saw a really strong demand from large banking institutions to participate in reserve banking operations with stablecoin clients,” he said then.
The OCC detailed how banks should handle their stablecoin reserves, particularly those backed by currencies such as the US dollar. The authority has taken a number of steps to integrate the crypto space with the existing financial system under the leadership of Brooks, a former general counsel for Coinbase. In recent months, the OCC has informed banks that they can provide services to crypto startups, and has released a national payment chart for exchanges and other fintech companies.
According to the letter, stablecoin issuers can point to the fact that regulated banks hold their reserves to convince the general public that they are safe.
The letter states that the guidance published by OCC only applies to stablecoins held in wallets controlled by a trusted third party. Non-hosted wallets that are controlled by an individual user who owns the stored cryptocurrency are not included in the clarification.
"The due diligence process should promote understanding of the risks associated with cryptocurrency and include checking for compliance with applicable laws and regulations, including those related to the Bank Secrecy Act (BSA) and anti-money laundering," the explanatory letter says. OCC.
This due diligence also includes compliance with the Patriot Act.
“Stablecoin reserve accounts can be structured either as deposits of the issuer of the stablecoin, or as deposits of an individual stablecoin holder, if the requirements for passing insurance are met,” the letter explains.
In addition, the US Securities and Exchange Commission (SEC) has said that some stablecoins may not be securities under federal law, but advised issuers to work with an agency and legal counsel to ensure that this is the case. According to the statement, the Securities and Exchange Commission is ready to issue a no-action letter that would assure the recipient that the regulator will not initiate enforcement action against the company.