Cryptocurrencies have officially been approved by the Office of the Comptroller of the Currency (OCC) to be available on the balance sheets of U.S. banks. The cryptocurrencies include Bitcoin (BTC), Ethereum (ETH), Solana (SOL), and XRP. Banks can as well use these assets to pay blockchain network fees.
Banks Get Green Light to Hold Crypto for Operational Use
The official announcement contained in Interpretive Letter 1186, explains the ways banks can apply crypto assets in their activities. It is also one of the biggest crypto regulatory approvals for the traditional finance industry in the country.
The decision opens the possibility of national banks to directly possess and use crypto assets as required to complete blockchain-based settlements. These include payment of transactions on networks like Ethereum or Solana.
The guidance also extends to tokenized platforms that use native tokens as fees also referred to as gas fees. They can now carry out and validate transaction on decentralized networks.
Until now, the majority of regulated banks were only able to indirectly deal with crypto, typically through third parties. The uncertainty surrounding crypto regulations discouraged many organizations from engaging in crypto-related services even as the need increased.
With this guidance, banks now have approval to acquire and hold select digital assets directly, as long as they are used to support legitimate operations like transaction settlement or platform testing. This follows the OCC’s earlier steps of permitting bank-stablecoin partnerships.
The OCC added that banks must take steps to manage associated risks. This includes maintaining proper internal controls, cyber protections, and compliance safeguards to ensure that crypto use remains safe and sound.
Regulators Shift Towards Clearer Crypto Regulations
The regulator highlighted that the current legal framework that governs national banks should be followed in all these blockchain-related activities. In addition to the use in operations, the OCC affirmed that banks were free to possess crypto assets for internal test purposes. This recommendation contributes to the implementation of blockchain in banking systems.
As an example, when a bank tests tokenized servicing rails or smart-contract services, it can now hold crypto in its custody. The move is an indication that the authorities is starting to realize the importance of crypto future of banking.
The possibility for banks to keep crypto assets for operational reasons can speed up the use of blockchain within the financial service industry of the United States. The OCC’s announcement provides fresh clarity. It also follows plans of the CFTC and the SEC to work together and clarify rules for the crypto market.
The interpretive letter underscores a shift in the regulatory landscape. It is a sign that the government is willing to embrace blockchain technology without losing oversight of the industry.
Source: https://coingape.com/banking-regulator-occ-greenlights-banks-to-hold-btc-eth-sol-xrp/
