The latest crypto guidelines from the OCC are being hailed as a win for the industry but Avanti Bank executive Caitlin said that they could prove to be a double-edged sword in the long run. The Office of the Comptroller of the Currency (OCC), a US Treasury Bureau engaged in regulating banks, issued a letter last week which detailed how national banks can use blockchains and stablecoins for making payments.
The news has not received much traction as it got drowned in the noise around Bitcoin’s historic rise and crash and other political events in the country. However, since then, many crypto personalities have shared their views on the letter, some hailing it as a welcome step from the authorities. Circle CEO Jeremy Allaire, whose company backs the USDC stablecoin said,
“The new interpretive letter establishes that banks can treat public chains as infrastructure similar to SWIFT, ACH and FedWire, and stablecoins like USDC as electronic stored value. The significance of this can’t be understated.”
The reality could be more complicated
Crypto supporters suggest that the reality is more complex than what the supporters or detractors of the letter assume. Wall Street Veteran Caitlin Long, who played an instrumental role in creating the blockchain laws of Wyoming said that the OCC letter is a “double-edged sword” for the industry. The guidance could be useful for big banks to remove all crypto startups from the bank. As national banks, they will have an advantage over startups and will not require regulators’ nod before entering into the stablecoin industry.
Crypto companies and smaller banks will need to get approval from regulators before working with stablecoins. This system is unfavorably tiled to provide benefits to large banks. This would allow the big banks in the US to create their own systems more quickly and let the network effect work for them faster.
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