Fintech: OCC Issues Significant Ruling Permitting National Banks To Use INVN And Stablecoin Technology

The Situation: On January 4, 2021, the Office of the Comptroller of the Currency ("OCC") issued an Interpretive Letter permitting national banks and federal savings associations ("Banks") to participate in independent node verification networks ("INVN") and to use stablecoin, a type of cryptocurrency designed to have stable value, to conduct payment and other activities permitted for banks.

The Result: The OCC Interpretive Letter relies upon longstanding regulatory and case law precedent holding that the business of banking should evolve and adapt to technological changes as they occur. The OCC concludes that validating, sorting, and recording payment transactions by serving as a node on an INVN, issuing stablecoin, and exchanging stablecoin for fiat currency such as U.S. dollars are permissible bank-payment activities when conducted consistent with applicable law and sound banking practices.