Federal regulatory agency states: Banks and savings institutions can provide reserve custody services for stablecoin issuers.

According to the latest regulatory guidance issued by the Office of the Comptroller of the Currency (OCC) in the United States, federal chartered banks and savings associations are now allowed to provide reserve custody services for stablecoin issuers.

A Major Step for USD Stablecoins

The Office of the Comptroller of the Currency (OCC) in the United States stated in its latest regulatory guidance:

"Stablecoin issuers may want to hold assets in reserve accounts at federally chartered banks and savings associations to ensure that the issuer's stablecoin in a hosted wallet has sufficient asset backing. For a number of reasons, we conclude that a national bank may provide permissible banking services to stablecoin issuers in connection with the activities described in this letter."

The OCC further emphasized that the new regulatory guidance only applies to "stablecoins anchored to a single fiat currency (like the U.S. dollar or another foreign currency) on a 1:1 basis," and stablecoins backed by a basket of assets are not within the scope of the permission. Additionally, banks are required to verify daily that the reserve account balance equals or exceeds the amount of the stablecoins issued but not yet redeemed by the issuer.

Lastly, the OCC reiterated its ongoing emphasis that banks engaging in such activities must comply with anti-money laundering regulations, KYC standards, and federal securities laws, and cautioned banks to consider all relevant risk factors, including liquidity and compliance risks, before entering into any agreements or relationships with stablecoin issuers.

Favorable Reactions to the Regulatory Guidance

Many industry observers and stakeholders have expressed enthusiasm for the decision by the Office of the Comptroller of the Currency, seeing it as a long-awaited and proactive regulatory shift.

Brian P. Brooks, the Acting Comptroller of the Currency, stated in a declaration:

"National banks are currently engaged in billions of dollars' worth of activities involving stablecoins every day. This regulatory guidance provides the necessary clarity for national banks to provide safe and sound services to their customers, as well as greater regulatory certainty."

Jeremy Allaire, CEO of Circle, the issuer of the USD Coin (USDC), stated:

"The latest regulatory guidance and commentary from the Office of the Comptroller of the Currency (OCC) represent significant progress for the field of 'digital dollar stablecoins' within the U.S. financial system."

However, while the regulatory guidance shows openness towards stablecoins, the U.S. Securities and Exchange Commission (SEC) stated that it will rigorously regulate token issuers collaborating with banks and publicly warned issuers not to attempt to issue or sell any digital assets with securities concerns under the guise of stablecoins.