The U.S Office of the Comptroller of the Currency (OCC) published an interpretive letter on Monday (Jan 4, 2021) approving national banks to use public blockchain networks. Cryptocurrency prices jumped out after that statement.
The letter addressed national banks and federal savings associations participating as nodes on a blockchain and storing or validating payments made in native digital assets or use stablecoins. That’s a big change for financial markets because until now financial institutions are able to use the public blockchains to store, validate, record, and settle payment transactions.
It is worth mentioning that the use of stablecoin for transactions can minimize costs for cross-border transactions and make it a cheaper and faster means of payment. What is more, the OCC letter empowering financial companies to use blockchain for converting to and from fiat currencies during the remittances or even issue stablecoins, if they want to.
After the letter was published on Jan 4, 2021 prices of cryptocurrencies jumped significantly: Ether (ETH) increased nearly 12% which gave Ethereum’s dominance as a stablecoin payment settlement protocol, and Bitcoin jumped above 5%. After the positive BTC and ETH reactions native tokens for other stablecoin-supporting networks, like Algorand and Solana also jumped. Let’s remind that both of them support the two largest stablecoins: Tether (USDT, +0.16%) (USDT) and Circle’s USDC (-0.05%) stablecoin.
Many banks still don’t accept Bitcoin, actually, the king of cryptocurrencies had its ups and downs, which, in a sense, could explain this skeptical approach. This volatility is also what makes bitcoin purchasing by credit card so risky for financial institutions since it is possible that these credit card purchases may not have enough future value to satisfy the repayment requirement.
Of course, there are many banks (especially in the US) where digital currencies are acceptable. Here are some examples of banks that enable the purchase of cryptocurrencies.
The USAA bank is the first major bank to invest in a crypto exchange. What is more interesting, the USAA banking application allows Coinbase users to check their cryptocurrency balances from their phones.
Simple Bank is also cooperating with most bitcoin exchanges and enables their customers for direct buy and sell transactions.
The USA is the major country, where banks saw the potential of crypto and makes available for their citizens using digital assets. The United Kingdom is also having a number of famous banks including crypto exchanges like Wirex, and mainly Revolut, where you can receive digital money sent by another Revolut user. Currently, customers are not able to receive cryptocurrencies sent from outside of the Revolut platform, but they are working to improve that and provide buy, sell and exchange crypto within the Revolut platform.
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