The ruling was delivered by an interpretive letter released on 4 January 2021 that clarified that national banks and federal savings institutions can participate in the market if they comply with the law, safety, and fair banking practices.
The reasoning from the OCC is that the adoption of blockchain and stablecoins may enhance the efficiency, effectiveness and stability of payments activities and achieve the benefits of real-time payments already enjoyed in other countries. The OCC notes that activities using both may be more resilient than existing payment networks.
The OCC does warn of potential risks when using blockchains including operation risks, compliance risks and fraud. It specifically warns that banks should guard against potential money laundering activities and terrorist financing by adopting their compliance programs to ensure compliance with the reporting and record-keeping requirements of the Bank Secrecy Act.
The decision to allow national banks and federal savings institutions to use blockchain tech and stablecoins comes after the OCC gave approval to both to hold cryptocurrency in July 2020. In that decision, also issued by letter stated that national banks may provide cryptocurrency services on behalf of customers including holding cryptographic keys associated with cryptocurrency. The letter also stated that national banks can also provide permissible banking services to any lawful business they choose, including cryptocurrency businesses, if they effectively manage the risks and comply with applicable law.
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