Recently the OCC published Interpretive Letter 1174, which says banks may use new technologies, including stablecoins, to perform payment activities. According to Forbes, this is an exciting innovation because the OCC is keeping up with the changing technology landscape. The OCC’s guidance opens the possibilities that banks will use stablecoins to transfer funds between financial institutions faster and without the need of a government intermediary.
Stablecoin is so named because it is designed to have a steady value compared to other forms of cryptocurrency. If backed by a fiat currency like the U.S. dollar, that is, a government-issued currency that is not backed by a commodity, stablecoins can typically be exchanged for the underlying currency. The stablecoin in this regard acts to facilitate key payment activities, including storing, transferring, transmitting, and exchanging value.
Find out more at virtual ePayConnect 2021, March 1 - 3, where Mark O’Horo, Counsel, Bank Advisory Group, OCC will present the session Next-Gen Payments with Stablecoin, including a Q&A led by Peter Tapling of PTap Advisory. Stay tuned for your opportunity to ask questions in advance!