page contents US banking regulator authorizes federal banks to hold reserves for stablecoins – The News Headline

US banking regulator authorizes federal banks to hold reserves for stablecoins

In step with an interpretive letter from the U.S. Place of work of the Comptroller of the Foreign money launched on Monday, nationwide banks will probably be unfastened to carry reserve currencies for stablecoins.

The brand new steering reads, “We conclude nationwide financial institution might hang such stablecoin ‘reserves’ as a carrier to financial institution consumers.”

Along the announcement, Performing Comptroller of the Foreign money Brian Brooks famous that stablecoin services and products are already part of many banks’ actions: “Nationwide banks and federal financial savings associations these days have interaction in stablecoin similar actions involving billions of bucks every day.”

The letter does, alternatively, specify that for now, this may occasionally simplest observe to stablecoins sponsored 1:1 with some other foreign money, which means that tokens depending on “baskets” of currencies like Saga or some variations of Libra are excluded. 

Tether (USDT) is a well-known instance of a stablecoin pegged to the U.S. buck, the usage of reserves held in New York. On the other hand, there was lingering controversy over Tether allegedly the usage of the ones reserves to hide losses at sister alternate Bitfinex.

Since Brian Brooks, the previous head of Coinbase’s prison division, took over as appearing head of the OCC in March, the workplace has been extraordinarily energetic in increasing the function that crypto can play in U.S. banks. In July, the OCC despatched out a an identical choice confirming that federal banks can custody crypto property.

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