As part of the Office of the Comptroller of the Currency’s (OCC) declared effort to keep pace with a mounting demand for faster, cheaper, and more efficient payments, and the widespread adoption of new technologies, the agency’s Senior Deputy Comptroller & Chief Counsel issued an interpretive letter on January 4, 2021 (the “Interpretive Letter”) clarifying the permissibility of independent node verification networks (INVNs) and related stablecoins. Under the Interpretive Letter, national banks and federal savings associations (FSAs) may use such new technologies to conduct bank-permissible functions, as long as such activities are conducted in a safe and sound manner and in accordance with applicable law.
The Interpretive Letter comes shortly after the release of a December 23, 2020 statement from the President’s Working Group on Financial Markets (the “Working Group Statement”) on the regulatory and supervisory considerations for stablecoin arrangements. The Working Group Statement encourages responsible payments innovation, while highlighting the requirement to strictly comply with applicable law, including all relevant anti-money laundering (AML), countering the financing of terrorism (CFT), and economic sanctions obligations. The OCC shares the Working Group Statement’s emphasis on the importance of legal compliance in the development of INVN and stablecoin arrangements.
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