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US To Allow Banks To Connect to Blockchains with Stablecoins

US To Allow Banks To Connect to Blockchains with Stablecoins
  • US interpretive letter allows national banks to connect to blockchains
  • Banks will begin integrating with blockchains by becoming a node
  • Banks will use stablecoins to transact payments on blockchains
  • US Treasury Department takes friendly measures to incorporate blockchain technology

The Office of the Comptroller of the Currency (OCC) said in an interpretive letter on Monday that federal institutions can now join blockchains.

Banks can do so by starting an independent node verification network (INVN). However, they can only use stablecoins to process all bank related payments.

The US Treasury Department made this decision as an affable approach to cryptocurrency. Furthermore, they wanted to bring concrete legal certainty to their banks when it came to blockchains.

Acting Comptroller of the Currency, Brian Brooks, said that this was a decision they made on behalf of their users. Since the rise of digital coins, demand for efficiency, speed, and low-cost trades went up.

Banks can now offer faster and more secure services to their users. Likewise, by using stablecoins they can provide the stability of fiat money. Thus, saving their users from the risk of highly volatile coins.

The letter clearly states that banks may now store, record, and validate payments on blockchains. Hence, the court will now recognize its authority to do so.

It also speaks of how banks have adapted to new tech in the past — and will continue as such. The letter goes on to strictly advise all banks to adhere to the law and provide a safe and fair practice.

Additionally, the OCC also advises banks to focus on managing new risks. It also says to take precautions against fraudulent activities. Banks should adopt new safeguards and prepare to handle new potential dangers.

An eager wordsmith who conveys her thoughts and fascinations through words and storytelling. Besides lurking on new and emerging technology forums, she’s always updated when it comes to blockchain.