The US OCC has made it clear that the Banks can offer reserve custody services for stablecoins.
The Office of the Comptroller of the Currency (OCC) is the federal agency responsible for banking supervision in the United States. It has been approached by a national bank asking if it can offer this type of service, that is, the custody of physical money that serves as a reserve for stable coins. The answer was yes, as long as the laws of the United States are respected.
This is in fact another opening of the OCC, which in recent months had already authorized banks to offer cryptocurrency custody services.
In yesterday's letter, the OCC goes further, stating that:
"A national bank can hold such stable currency 'reserves' as a service to bank customers."
Which, he notes, does not mean authorizing the transaction, but simply verifying it:
"At least daily, the reserve account balances are always equal to or greater than the number of stablecoins in circulation of the issuer."
A bank that wants to offer this type of service must comply with all national laws and regulations and conducting efficient due diligence to ensure you are aware of the associated risks in this area.
In particular, the bank must pay special attention to anti-money laundering laws, identify customers and verify that they comply with the legal requirements to open checking accounts.
The letter also acknowledges that the demand for stablecoins is growing, as evidenced by the higher capitalization of Tether, the queen of stablecoins. Therefore, the OCC believes that it is legitimate for anyone who has stable coins to also want to be sure that the corresponding fiat money is safe. And if it is true that banks offer escrow services, then it is plausible that banks can hold fiat money equivalent to the cryptocurrency linked to them. However, banks must be aware of the risks involved and carefully prepare contracts with their clients in this regard.
The man in charge of the OCC, Interim Comptroller of Currency Brian P. Brooks said:
"National banks and federal savings associations are currently engaged in stablecoin activities involving billions of dollars every day," said Acting Comptroller of the Currency Brian P. Brooks. "This opinion provides greater regulatory certainty for banks within the federal banking system to provide those services to clients in a secure and robust manner."
With banks, stablecoins become securities
The letter was followed by an "interpretation" by the SEC's FinHub staff. First, it is noted that the OCC refers to stablecoins pegged to fiat currencies, then to the dollar or other foreign currencies. But FinHub goes further and adds:
“If a particular digital asset, including one labeled stablecoin, is a security under federal securities laws, it is inherently a determination of facts and circumstances. This determination requires a careful analysis of the nature of the instrument, including the rights it purports to convey and how it is offered and sold ”.
In practice, stablecoins are recognized as securities in the United States.
This means that those who offer services related to cryptocurrencies, and stablecoins in particular, must ask themselves if they comply with the laws of the United States. Therefore, the interpretation invites parties who feel involved to contact FinHub staff to verify that their position is in line with federal law.
Ultimately, there seems to be a movement toward institutionalization of stablecoins in the U.S. The legislator seems to be becoming aware that the revolution caused by cryptocurrencies and in particular stablecoins is irreversible, given the growing demand for trade, custody and use as payment systems.