The Office of the Comptroller of the Currency (OCC) released an interpretative letter on Monday, stating that banks can now use stablecoins and blockchains to validate, store, and record payments transactions and other permissible payment activities.
According to the letter, “banks may serve as a node on an INVN and use INVNs and related stablecoins to conduct permissible banking activities, including authorized payment activities.”
The letter stated that the dynamic nature of the banking system necessitates the adoption of more advanced and efficient technologies like INVNs (independent node verification network), also known as blockhain networks.
“The changing financial needs of the economy are well-illustrated by the increasing demand in the market for faster and more efficient payments through the use of decentralized technologies, such as INVNs, which validate and record financial transactions, including stablecoin transactions,” the report read.
Bitcoin is still maintaining its $30k mark with a current price of $31,821.12. In the last 24 hours, bitcoin has gone up by 1.69%. Bitcoin has a current market cap of $591.58B and a market volume of $64.93B. In the last 24 hours, bitcoin has dropped to $29,948.65 and experienced 24 hours high of $32,831.26. Currently, 18,591,387.5 bitcoins are in circulation.
Stats and Image from Coin Desk
The OCC, an independent bureau of the US Treasury charged with regulating banks also added that the use of stablecoin and existing currency, facilitated by INVN technology would lead to efficiency, speed and stability of payment in the banking system.
The OCC, however, stated that “a bank must conduct these activities consistent with applicable law and safe and sound banking practices.”
According to the letter, stablecoins are designed to have a stable value and are backed by a fiat currency, so “the stablecoin represents a mechanism for storing, transferring, transmitting, and exchanging the underlying fiat currency value, all of which are key to facilitate payment activities.”
A report by Coin Desk says Bitcoin and Ethereum jumped by 5% and 12% respectively following the release of the letter by the OCC on Monday.