- Acting Comptroller of the Currency Brian said that several national banks and federal saving institutions are engaging themselves in activities related to stablecoins
- The letter specifically mentioned that the stablecoin wallets must be hosted
- The SEC again has declared that Stablecoins are not securities under the federal law
The Office of the Comptroller of the Currency (OCC) and the Securities and Exchange Commission (SEC) have recently published a press release regarding clarifications on the cryptocurrencies backed by fiat currencies or stablecoins. This marked the first ever detailed national guidance on stablecoin and has cleared the air regarding the uncertainty in the Stablecoin regulation among the issuers.
The OCC Acknowledges Stablecoin Regulatory Questions
The Acting Comptroller of the Currency Brian P. Brooks in the press release said that several national banks and federal saving institutions are engaging themselves in activities related to stablecoins which involve billions of dollars. Hence, the opinion is set to provide regulatory certainty to the federal banking systems to offer the client services involving stablecoins in a much safer and secure way. The letter mainly acknowledges the regarding the stablecoin related banking operations. In addition the letter mentioned that national banks and federal savings associations are allowed to hold reserves on behalf of the users who tend to issue these fiat based cryptocurrencies and the coins are apparently hosted in wallets.
Use of Stablecoins Backed by a Single Fiat Currency on One to One Basis
Moreover, the letter acknowledges the use of these stablecoins backed by a single fiat currency on a one-to-one basis. The banking institutions must very the fact that reserve account balances meet or exceed the number of the issuer’s outstanding stablecoins. The stablecoin issuers can utilise the fact that regulated banking institutions hold reserves in order to convince the mass that it is a safe and secured investment. The letter specifically mentioned that the stablecoin wallets must be hosted, hence wallets held by individuals or unhosted wallets weren’t subject to the OCC declaration.
Stablecoins are not Securities Under Federal Law
The SEC again has declared that Stablecoins are not securities under the federal law. However, it has advised the issuers of stablecoins to recheck with the agency if this is the case. The SEC is planning on to issue a no-action order. This would confirm the recipient that the regulator would not involve any legal enforcement at any given point of time. The SEC declared that the determination of whether the stablecoin is a security or not still requires a heavy amount of analysis.