US banks can hold reserves backing crypto stablecoins

2020-9-23 17:00

In a fundamentally important development for the cryptocurrency industry, the US Office of the Comptroller of the Currency (OCC) said today that national banks and federal savings associations are legally allowed to hold the currency “reserves” that back stablecoins.

Stablecoin reserves can now be held by US banks

For the uninitiated, stablecoins are specialized cryptocurrencies pegged on a 1:1 ratio with a fiat currency — most popularly the US dollar — that offer investors and traders with an easy fiat on-ramp to the crypto market. Examples include Circle, Tether, and even crypto exchange-backed currencies like Binance USD.

1/3 Breaking News: OCC Guidance on National Bank support for Stablecoins — https://t.co/ixsH4qj3MB

— Jeremy Allaire (@jerallaire) September 21, 2020

So far, centralized bodies like custodian BitGo and Tether Foundation were trusted to hold the reserves they claimed: Meaning if there were $1 billion in USDT issued, the Tether Foundation was trusted to actually hold $1 billion in a bank account somewhere. However, this approach created controversies in the broader crypto market, and understandably so.

But as per the OCC announcement, such reserves can now be stored with custodian and recognized US banks, a move that garners could garner trust among crypto market participants (although an ironic move considering the anti-bank ethos of cryptocurrencies).

“National banks and federal savings associations currently engage in stablecoin-related activities involving billions of dollars each day,” said Acting Comptroller of the Currency Brian P. Brooks. He added:

“This opinion provides greater regulatory certainty for banks within the federal banking system to provide those client services in a safe and sound manner.”

Stablecoin growth booming

In just the past six months of 2020, demand for digital dollar stablecoins has surged, with stablecoins such as the USDC, issued by US firm Circle, growing from just over 400 million in circulation to over 2.3 billion today, representing nearly 500% growth YTD. 

Meanwhile, in a statement shared with CryptoSlate, Circle said the USDC has supported over $130B in transactions on public blockchains and is already widely adopted and supported by hundreds of companies in the digital asset and blockchain ecosystem.

3/3 National banks may now hold reserves for full-reserve fiat-backed stablecoins in the US banking system.

— Jeremy Allaire (@jerallaire) September 21, 2020

It added, “With this clarity from the US Treasury Department around the standards for banks to hold reserves on behalf of stablecoin issuers, businesses of all sizes, fintech firms and banks can have more confidence in building on this innovation, while also ensuring that the guardrails and risk management expected from the US banking system can be applied to this new age of internet money.”

But were banks really the answer for building trust in the reserves backing stablecoins?

The post US banks can hold reserves backing crypto stablecoins appeared first on CryptoSlate.

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stablecoins currency banks reserves hold today national

Источник: cryptoslate.com

stablecoins currency → Результатов: 110


Фото:

Decentralizing the Dollar: Crypto-Collateralized Stablecoins

Decentralizing The Dollar is a three-part series on stablecoins, each addressing one of the three key methods postulated for tying a stable cryptocurrency to a fiat currency. In Part One, we examined how TrueUSD might rectify the flaws in Tether; in Part Two we looked at Kowala, and algorithmic stablecoins; and in Part Three we’ll […] The post Decentralizing the Dollar: Crypto-Collateralized Stablecoins appeared first on Crypto Briefing.

2018-10-19 21:48


Фото:

Huobi Joins OKEx in Adding Four New Stablecoins

Huobi Global has announced its decision to list four USD-pegged stablecoins by the end of the week. In a support notice published on its platform, the company noted that users will be able to make deposits for Paxos Standard Token (PAX), True USD (TUSD), Circle’s (USDC), and Gemini exchange’s (GUSD) on its exchange starting from Friday, October 19, 2018 (GMT +8).

2018-10-17 21:15


Berkeley Professor Questions Stablecoin Viability in Unflattering Op-Ed

University of Berkeley Professor Barry Eichengreen has taken a swipe at the viability of stablecoins in an op-ed published on Project Syndicate. The critique, entitled “The Stable-Coin Myth,” argues stablecoins are not automatically "viable" just because they are pegged to an asset, though Eichengreen does believe they have an advantage over "conventional cryptocurrencies" such as bitcoin which he says "is highly unstable" and "unattractive as units of account.

2018-9-13 18:07


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