Office of the Comptroller of the Currency clarifies the authority of national banks and federal savings associations to perform Stablecoin activities


The Office of the Comptroller of the Currency (OCC) has issued a letter responding to questions regarding the authority of banks to undertake stablecoin-related activities. The authority explained that national banks and federal savings associations may hold ‘reserves’ on behalf of certain stablecoin users. A stablecoin is a cryptocurrency backed by a fiat currency or another asset.

OCC’s letter only addresses the use of stablecoin through hosted wallets and backed by a single fiat currency. Moreover, the banks must regularly verify that a user’s ‘reserves’ have at least the same number of stablecoins as are outstanding in the user’s account. Banks offering stablecoin services must comply with the laws that govern the sector. They must also put the necessary controls in place.

Additionally, customer due diligence must be performed for all stablecoin issuers. This process should explain to all users the risks of cryptocurrency. It should also provide a guideline for compliance with the Bank Secrecy Act (BSA) and AML laws. The guideline should include customer due diligence and customer identification requirements. All banks dealing with stablecoins must also identify and verify the beneficial owners of all user accounts and comply with all applicable securities laws.