The crypto industry keeps getting more interest from governmental institutions, as people continue to buy Bitcoin amidst the global economic chaos.
In most recent news federally regulator banks are now allowed to make payments and money transactions using Stablecoins as their vehicle of choice, according to the Office of the Comptroller of Currency.
Stablecoins for better banking systems
The regulator of federal banking in the US recently announced that national banks and federal savings associations can use independent node verification networks (a.k.a. Blockchains) or Stablecoins for all their transactions, payment validations, or data storage.
The following “tweetstorm” analyses the recent news in more detail:
1/ Breaking major news from US Treasury OCC, the largest US banking regulator (@USOCC), with new guidance allowing US banks to use public blockchains and dollar stablecoins as a settlement infrastructure in the US financial system. https://t.co/gQFWISWUnc
— Jeremy Allaire (@jerallaire) January 4, 2021
Banks are asked to perform in-depth research to familiarize themselves with all the risks involved and make an independent decision if the decision to scale towards a Stablecoin payment system is in their best interest. The announcement letter points out that blockchains (or INVN’s, as they are referred to) provide more resiliency than traditional payment networks due to a large number of validating nodes that confirm data.
Moreover, we saw the executive director of the Blockchain Association pointing out that the OCC letter praised blockchain networks, comparing them to the likes of SWIFT, ACH, and FedWire.
“the letter states that blockchains have the same status as other global financial networks, such as SWIFT, ACH, and FedWire.” https://t.co/eAKDBY3LqY
— Kristin Smith (@KMSmithDC) January 4, 2021
According to the Acting Comptroller of the Currency, Brian Brooks, other nations have improved the development of their payments systems, focusing mainly on leveraging a fully digital model. On the contrary, the United States has put more emphasis on the private tech sector, which is responsible for the development, growth, and mainstream usage of cryptocurrencies.
Brian has overlooked the development and publication of two more similar letters and a number of other moves that many would consider crypto-friendly, including a letter that prompts federal banks to support Stablecoin issuing parties, storing their reserves needed to issue their coins.
Additionally, Brooks showed public support for a letter written by the President’s WGFM, detailing how the use of Stablecoins can be introduced and regulated within the United States.
Brooks is known to be a favorite of former President Trump, as he was appointed twice in a row to serve his five-year term. However, it is of yet unknown if the US Senate will confirm the second term; at least not before president-elect, Joe Biden takes office. One thing is for sure, however – if Brian ends up serving the US for another five years, we can expect to see cryptocurrencies prices flourish, with regulatory frameworks that promote a decentralized future:
Thanks to everyone who supported me and contributed ideas over the past nine months! Here’s where I think we are and where we’re going:
— Brian Brooks (@BrianBrooksOCC) January 19, 2021
Where do we go from here?
The recent letter comes to show that the US government is not fighting against cryptocurrencies, but rather realized that their underlying technology can improve the foundation of the future of payments. The same is true for all other financial applications.
Decentralized financial systems have long proven to work better than centralized entities of the same caliber, as they do not rely on trust towards independent parties, and are primarily governed by code and smart contracts. This, in turn, removes the need for external validation from third parties and enables the financial system to perform better for the people.
Obviously, the big question that remains is whether the US government will take a positive or negative stance against Bitcoin. The popular cryptocurrency has long been a topic of debate, and we only recently saw Janet Yellen take a negative stance against the shady usage of cryptocurrency payments.