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OCC gives banks stablecoin guidance

OCC gives banks stablecoin guidance

The Office of the Comptroller of the Currency has given federally chartered banks the green light to hold "reserves" on behalf of customers who issue certain stablecoins.

The move gives clarity to banks offering services to stablecoin issuers in situations where the coins are backed one-to-one by fiat currencies and held in hosted wallets.

In a letter, Acting Comptroller of the Currency Brian Brooks says: "National banks and federal savings associations currently engage in stablecoin-related activities involving billions of dollars each day.

"This opinion provides greater regulatory certainty for banks within the federal banking system to provide those client services in a safe and sound manner."

Cryptocurrency firm Circle, which has its own stablecoin, says the move gives issuers of such coins, fintech firms and banks more confidence "while also ensuring that the guardrails and risk management expected from the US banking system can be applied to this new age of internet money".

The OCC letter comes hot on the heels of its decision to let banks offer cryptocurrency custody services, enabling financial institutions to extend their traditional role as intermediaries in the safekeeping of stock certificates and the like to the emerging realm of digital assets.

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