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Speculations From the OCC Allowing Banks to Handle Stablecoin Payments

US regulator looking at a box full of stablecoins

US regulator looking at a box full of stablecoinsThe Office of the Comptroller of the Currency (OCC) recently approved the use of stablecoins for banks to process financial transactions. However, issues arose from the new OCC guidelines on what this could mean for the entire crypto community and stablecoins, even in the future.  Speculations on the New Guidelines The announcement led to ETH

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The Office of the Comptroller of the Currency (OCC) recently approved the use of stablecoins for banks to process financial transactions. However, issues arose from the new OCC guidelines on what this could mean for the entire crypto community and stablecoins, even in the future. 

Speculations on the New Guidelines

The announcement led to ETH rising by nearly 12% with Ethereum’s dominance as a stable payment processing protocol, and Bitcoin up 5%. The two leading cryptocurrencies almost wholly pulled from their Sunday evening losses.  

Tanvi Ratna, a policy advisor, gave speculations on what the OCC guidelines could mean to the cryptocurrency space in a Twitter thread.

She said that most people have caught on that stablecoins getting linked to banks will make them more regulated and justify full AML/KYC disclosures. It will be mandatory anywhere at any time, not just in the United States.

The OCC recently offered banks the ability to provide services to stablecoin suppliers. It could have significant consequences for the entire crypto market as stablecoins are the primary liquidity tool for most cryptocurrency trading activities worldwide. Bitcoin price is hence affected as its rise pump is often associated with whale wallet movement.

The regulation effectively opens the door to many Wall Street stablecoins. Most banks want to manage their stable currency, manage their reserves, and have additional income sources. There will be a steady wave of coins created by big banks and fintech to gain dominance and top the competition with existing market share and revenue-generating network effects. Blockchain can hence become a less free market.

The OCC Letter

The acting OCC Supervisory Brian P. Brooks said the President’s Working Group on Financial Markets had recently formulated a robust framework to usher in an era of reliable currency-based financial infrastructure. 

The letter applies to national banks and federal savings banks that participate as nodes in the blockchain and store or validate payments in local digital assets or stable coins. It removes the legal uncertainty about the bank’s authority to connect the blockchain as a validation node and thus performs stablecoin transactions for customers who increasingly need the speed, efficiency, interoperability, and low cost of these products.

The OCC letter contradicts a bill introduced at the last session of the U.S. Congress, according to which stable coin issuers must receive a bank certificate. This aggressive anti-stability proposal has resulted in donations of hundreds of thousands of dollars sent to the leading cryptocurrency advocacy group, Coin Center.

In mid-December, the finance department proposed a comprehensive customer knowledge (KYC) rule for U.S. cryptocurrency users who want to move their holdings from the exchange to their wallets.

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Source: https://btcmanager.com/occ-banks-stablecoin-payments/

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Pawtocol CEO Karim Quazzani on New to the Street

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Pawtocol is a global online community of pet lovers who are disrupting the pet industry by leveraging blockchain technology while monetizing data about their pets.

Pawtocol

Data is aggregated from IOT devices like our Blockchain Dog Tag, vets and more. Users maintain full control over the data about their pets

Pawtocol CEI(ETN) CEO Karim Quazzani dicusses the latest developments with Jane King on New to the Street

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ABOUT US
Exploring the Block profiles Blockchain Technologies and Companies. Exploring the Block produces multi-part series following the goals and achievements of the companies we follow and invite our audience to track the growth and challenges these companies face. Each series provides personal look at the company through the eyes of the CEO or company executive as they discuss their goals, roots and products with our experienced team of anchors/journalists to provide our viewing audience with who, what, where, when and why about the companies you want to learn about.

New To The Street profiles public companies, advertises and markets their products and services, and provides business news. New To The Street paves the way to the latest financial issues, offering a blend of business and financial services news reporting and in-depth interviews relating to new products, economic analysis and public company profiles. New to the Street is produced by FMW Media Works Corp.

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FMW Media Corp. operates one of the longest-running U.S and International sponsored programming T.V. brands “NewToTheStreet,” and its blockchain show “Exploring The Block.” Since 2009, these brands run shows across major U.S. Television networks. These TV platforms reach over 540 million homes both in US and international markets. Developing 2-additional shows “TheBestinNY” and “The Ultimate Listing0”

Source: https://exploringtheblock.com/pawtocol-ceo-karim-quazzani-on-new-to-the-street/

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Nebraska senator introduces bills to allow state banks to custody crypto

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A Nebraska state senator has proposed new crypto-friendly legislation which could see his state become the next regulatory safe haven for FinTech firms.

Sworn in just two weeks ago, Republican Mike Flood today introduced the Transactions in Digital Assets Act and Adopt the Nebraska Financial Innovation Act to the state’s 107th Legislature.

The two bills lay out guidelines for state banks to be able to custody digital assets in addition to creating financial institutions dealing in digital assets for which Nebraska would provide “charter, operation, supervision, and regulation”. The measures would also give local courts the jurisdiction to hear claims “in both law and equity relating to digital assets.”

The proposed legislation will likely move to committee before a general file in the state legislature, where Republican lawmakers currently outnumber Democrats almost two-to-one, 32 to 17.

The proposed bills also aim to address the problem of major banks in the United States discriminating against businesses and individual customers using crypto.

“The rapid innovation of blockchain and digital ledger technology, including the growing use of virtual currency and other digital assets, has resulted in many blockchain innovators and consumers being unable to access secure and reliable banking services, hampering development of blockchain services and products in the marketplace,” states the second bill.

“Many financial institutions in Nebraska and across the United States [refuse] to provide banking services to blockchain innovators and customers and also [refuse] to accept deposits in United States currency obtained from the sale of virtual currency or other digital assets.”

Flood, who previously served as a member and speaker of the Nebraska Legislature until 2013, said he planned to introduce bills intended to make his district a FinTech hub. In a meeting of the Norfolk Chamber of Commerce’s Governmental Affairs Committee last Wednesday, the state senator described cryptocurrency as a market with “great opportunity” for Nebraska.

“This is the future,” said Flood. “To be on the cutting edge of [crypto], I think, is good for us. We need to be a leader in FinTech. We in Norfolk have as much right to this new market as any other place in America.”

Under the 10th amendment to the U.S. Constitution, state laws can often be independent of, or even contradictory to federal laws. One example of this in the crypto space is exchanges such as Binance U.S. having to go state by state to legally make its services available to U.S. residents.

Last July, the Office of the Comptroller of the Currency announced that federally chartered banks would be allowed to provide custody services for cryptocurrency. Though the measures Flood proposed would not be needed for federally chartered banks in Nebraska, the proposals seemingly attempt to extend this benefit to state-chartered banks.

Source: https://cointelegraph.com/news/nebraska-senator-introduces-bills-to-allow-state-banks-to-custody-crypto

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Some institutional investors taking profit as Bitcoin retraces

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A new report from crypto fund provider CoinShares has indicated that some institutional investors have been realizing profits during BTC’s recent consolidation.

CoinShares’ weekly digital asset flows report identifies $85 million in outflows from institutional crypto products this past week, asserting the data suggests “some investors are continuing to take profits after [BTC’s] strong price appreciation.”

The report noted the rising (trade-weighted) U.S. dollar, stating the USD index “is typically inversely correlated to Bitcoin prices,” and could explain why some investors are taking profits at the current levels.

The firm also identified modest outflows from Ethereum-derived investment products, with $3 million leaving the markets.

Despite the profit-taking, institutional inflows remain strong, with $359 million flooded into crypto investment products this week. Institutions still appear almost single-mindedly focused on BTC, with Bitcoin products representing all but 1% of the week’s total capital flows.

CoinShares notes that crypto inflows have returned to their pre-Christmas levels, following the 97% drop over three weeks seen after the holiday break. Daily volumes are currently up more than 450% year-over-year.

Institutional products currently represent 6% of combined Bitcoin volume — down from 14% at the start of the month.

Much has been lately of the growing institutional appetites for crypto, with major global companies recently filling their treasuries with BTC.

After hosting more than 11 million BTC worth of futures trade in 2020, Chicago Mercantile Exchange announced last month that it plans to launch cash-settled Ethereum futures contracts in early February, pending regulatory approval.

On Jan. 20, Ninepoint Partners filed its final prospectus for a Bitcoin Trust conditionally approved by the Toronto Stock Exchange.

Source: https://cointelegraph.com/news/some-institutional-investors-taking-profit-as-bitcoin-retraces

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