Home

Products

Institutions

Resources

Company

Language

Download

Amber Group logoAmber Group logo

Home

Products

Institutions

Resources

Company

Sign Up

Download

En

Home / Market News / 

US Banking Regulator Authorizes Federal Banks to Hold Reserves for Stablecoins

US Banking Regulator Authorizes Federal Banks to Hold Reserves for Stablecoins

C

COINTELEGRAPH | 2020/09/21

Federal banks in the U.S. see new capacity to provide services to crypto firms, specifically stablecoin operators.

US banking regulator authorizes federal banks to hold reserves for stablecoins

Per an interpretive letter from the U.S. Office of the Comptroller of the Currency released on Monday, national banks will be free to hold reserve currencies for stablecoins.

What is a stablecoin? A stablecoin is a new class of cryptocurrencies that attempts to offer price stability and are backed by a reserve asset. Stablecoins have gained traction as they attempt to offer the best of both world's- the instant processing and security or privacy of payments of cryptocurrencies, and the volatility-free stable valuations of fiat currencies.

 

The new guidance reads, "We conclude that a national bank may hold such stablecoin 'reserves' as a service to bank customers."

 

Alongside the announcement, Acting Comptroller of the Currency Brian Brooks noted that stablecoin services are already a part of many banks' activities: "National banks and federal savings associations currently engage in stablecoin related activities involving billions of dollars each day."

 

The letter does, however, specify that for now, this will only apply to stablecoins backed 1:1 with another currency, meaning that tokens dependent on "baskets" of currencies like Saga or some versions of Libra are excluded.

 

Tether (USDT) is a famous example of a stablecoin pegged to the U.S. dollar, using reserves held in New York. However, there has been lingering controversy over Tether allegedly using those reserves to cover losses at sister exchange Bitfinex.

 

Since Brian Brooks, the former head of Coinbase's legal department, took over as acting head of the OCC in March, the office has been extremely active in expanding the role that crypto can play in U.S. banks. In July, the OCC sent out a similar decision confirming that federal banks can custody crypto assets.

 

Original title: US banking regulator authorizes federal banks to hold reserves for stablecoins


Disclaimer

 

The views expressed in this article are the author's own and do not necessarily reflect the view of Amber Group. Amber Group shall not be held liable under any circumstances for any losses, damages or expenses arising from the use of any content mentioned in this article.

 

The information contained on this website is provided for informational purposes only, with no warranties, or guarantees made as to the accuracy, completeness or timeliness of it. Amber Group assumes no liability or responsibility for any errors or omissions in the information contained on this site. We strongly encourage you to conduct your own research before taking any action.

 

This site may contain copyrighted material, the use of which has not always been specifically authorized by the copyright owner. If you wish to use the copyrighted material from this site for the purposes of your own that go beyond 'fair use', you must obtain permission from the copyright owner. Authors or publishers who claim ownership of copyrighted articles reprinted on this website and wish for the content to be removed may email us directly at official.accounts@ambergroup.io

 

If you would like to connect with us about any of the distributed content or other inquiries, please email us at official.accounts@ambergroup.io with the relevant documentation.


View Original Article >

Most Popular
The Digital Yuan Pilots Have Processed $300M So Far According to PBoC Offical
China’s digital yuan pilot program is picking up speed.
US Fed Is Broading Its Research on CBDC to Explore its “Intrinsic” Value Drivers
Fed economists are beginning their deep dive into CBDC research, hoping to identify the "intrinsic" value drivers of a digital dollar.
The New Mate 40 Is Equipped with Digital Currency Wallet
China’s digital yuan looks closer than ever to launch with the news that Huawei will be supporting the central bank digital currency (CBDC) on an upcoming range of phones.