According to a press release by the US Office of the Comptroller of the Currency (OOC), Federally chartered banks and savings associations’ may utilise stablecoins and public blockchains for payment settlements and other banking functions.
In terms of the interpretive letter, Federally chartered banks and savings associations’ may run nodes for validating, storing, and recording transactions on public blockchain networks. Referring to independent node verification networks (INVNs), the OOC said that banks “may use new technologies, including INVNs and related stablecoins, to perform bank-permissible functions, such as payment activities.”
“Banks may serve as a node on an INVN and use INVNs and related stablecoins to conduct permissible banking activities, including authorized payment activities.”
Jeremy Allaire, Co-founder and CEO of Circle, took to Twitter to boast this as “A huge win for crypto and stablecoins”.
2/ This is a huge win for crypto and stablecoins – $USDC
— Jeremy Allaire (@jerallaire) January 4, 2021
Allaire further outlined the fact that banks can now treat public chains as infrastructure similar to SWIFT, and use stablecoins like USDC as electronic stored value. This is an extremely significant win for crypto and has the potential to replace traditional payment rails which are outdated, slow and expensive.
5/ We are on a path towards all major economic activity being executed on-chain. It is tremendous to see such forward thinking support from the largest regulator of national banks in the United States.
— Jeremy Allaire (@jerallaire) January 4, 2021
Charles Edwards, founder of Capriole Investments, stressed the importance of this news, highlighting its importance for international remittance and foreign transfer settlement. Edwards claimed outdated and slow systems like the Society for Worldwide Interbank Financial Telecommunication (SWIFT), International Bank Account Numbers (IBANs) and the Single Euro Payments Area (SEPA) would all become insignificant, as instantaneous banking transfers will take over.
Say goodbye to slow multi-day banking.
IBAN will die.
SWIFT will die.
SEPA will die.Saw hello to instantaneous banking transfers.
The way it was meant to be. https://t.co/uPAnp9NSP3
— Charles Edwards (@caprioleio) January 4, 2021
Feature image by Dog97209 from flickr
