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OCC Interpretive Letter #1174 Allows Banks to Act as Blockchain Nodes and Develop/Utilize Stablecoins




interpretive letter

In the newly released interpretive letter #1174 from the Office of the Comptroller of the Currency (OCC), United States based banks are now permitted to not only act as nodes within a blockchain network, but may develop/issue/utilize their very own stablecoins.

“National banks and Federal savings associations (collectively referred to as “banks”) may use new technologies, including INVNs and related stablecoins, to perform bank-permissible functions, such as payment activities.”

Banks were recently provided clarity on custodial services surrounding digital assets, which allowed for this the practice to occur.  With the door to blockchain now wedged open, this new letter appears to push it open further, by facilitating new services – to the benefit of both banks and clients alike.

Top Stablecoins

While banks may now have permission to begin developing their own stablecoins, there will surely be many instances where already established examples will be turned to.  The following are a couple of the stablecoins which would most likely be used in a scenario such as this.

  • USDC
    • A product of Boston based Circle, and Seattle based Coinbase, USDC is a stablecoin pegged to USD.
  • GUSD
    • A product of New York based Gemini Exchange, GUSD is also pegged to the USD.

Although Tether (USDT) remains the most popular stablecoin to date, by marketcap, it is a product of Bitfinex – a foreign company with a checkered past surround the status of its tokens true backings.  One would assume that U.S. based banks would turn to popular home-grown, and highly regulated offerings.

Regardless of which stablecoin banks turn to, it would appear as though the decision made by the OCC to allow their usage is partly based on recent growth.

The OCC notes, “Industry participants recognize that using stablecoins to facilitate payments may combine the efficiency and speed of digital currencies with the stability of existing currencies…stablecoins can provide a means of transmitting value denominated in an existing currency using INVN [blockchain] technology.  Stablecoins thus provide a means by which participants in the payment system may avail themselves of the potential advantages associated with INVNs.  Billions of dollars’ worth of stablecoin trade globally, and demand for stablecoin continues to grow.”

Interpretive Letter #1170

For those that follow regulatory developments pertaining to blockchain, this open approach towards the technology is nothing new from the OCC.  As previously alluded, in 2020 the OCC released Interpretive Letter #1170,  which first opened the doors for U.S. based banks to begin offering custodial services for digital assets.  We also reported on similar action taken by banks located in South Korea.

With the growth seen since surrounding the blockchain sector as a whole, as while as stablecoins in particular, the new interpretive letter today appears to be a natural progression in the OCCs acceptance of the technology.


Founded in 1863, the Office of the Comptroller of the Currency is one of the oldest bureaus within the United States.  Under the watch of Acting Comptroller of the Currency, Brian P. Brooks, the OCC works to ensure the national and federal banking systems operate in a safe and regulatory compliant manner.