U.S. OCC and SEC published the first detailed national guidance on stablecoins

23 Sep, 2020 03:51
source: Singularity Financial

Singularity Financial Hong Kong September 23, 2020 – The Office of the Comptroller of the Currency (OCC) and the Securities and Exchange Commission (SEC) published stablecoin guidance Monday, providing the first detailed national guidance on how cryptocurrencies backed by fiat currencies should be treated under law, according to a report from Coindesk.

Prior to Monday’s notices, there was no federal clarity around stablecoins.  Stablecoin issuers have been using U.S.  banks for years, but in an unclear regulatory environment. Now, the OCC wants federally regulated banks to feel comfortable providing services to stablecoin issuers, it said in a press release.

An accompanying interpretative letter, signed by Senior Deputy Comptroller Jonathan Gould, explained that while banks should conduct due diligence and ensure they assess the risks of banking any stablecoin issuers, stablecoins are becoming increasingly popular.

This is the first instance of federal clarity around stablecoins, referring specifically to tokens backed on a one-to-one basis by fiat currencies rather than their algorithmically derived counterparts, CoinDesk regulatory reporter Nikhilesh De said.

Acting OCC Comptroller Brian Brookes said that stablecoin services are responsible for “billions of dollars each day” flowing through the financial plumbing.

Further, the U.S. Securities and Exchange Commission (SEC) said certain stablecoins  might not be securities under federal law, but advised issuers to work with the agency and legal counsel to ensure this is the case.

According to the statement, the SEC is willing to publish a “no-action” letter, which would assure the recipient that the regulator would not bring an enforcement action against the company.

“Whether a particular digital asset, including a so-called “stablecoin,” is a security under the federal securities laws is inherently a facts and circumstances determination. This determination requires a careful analysis of the nature of the instrument, including the rights it purports to convey, and how it is offered and sold,” the SEC said.