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Stablecoins

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On July 21, 2021, U.S. Securities and Exchange Commission Chairman Gary Gensler spoke at an American Bae Association event. His main topic was security-based swaps. But at the end of his prepared remarks, the Chairman went out of his way to comment about the intersection of security-based swaps and financial technology, including cryptoassets. With respect to initiatives to offer crypto tokens or other products that are priced off of the value of securities and operate…

The U.S. Office of the Comptroller of the Currency (OCC) published a letter on January 4, 2021 (January 2021 Letter) clarifying the authority of national banks and thrift institutions (collectively, Banks) to participate in independent node verification networks (INVN) and use stablecoins to conduct payment activities and other bank-permissible functions. The January 2021 Letter follows a September 21, 2020 letter from the OCC (see our post here) which concludes that Banks may hold “reserves” on…

On September 21, 2020, the U.S. Office of the Comptroller of the Currency (OCC), the regulatory agency charged with overseeing banks, published an interpretive letter clarifying national banks’ and federal savings associations’ authority to hold “reserves” on behalf of customers who issue certain stablecoins. Generally, a stablecoin is a type of cryptocurrency designed to have a stable value as compared with other types of cryptocurrency, which frequently experience significant volatility. One type of stablecoin is…