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ARTICLE · 24 SEPTEMBER 2020

OCC Concludes National Banks Have Authority To Hold Stablecoin Reserves

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In an Interpretive Letter, the OCC affirmed the authority of a national bank or federal savings association to hold stablecoin reserves for customers, subject to certain conditions.

United StatesTechnology
Hogan Lovells Cadwalader
Hogan Lovells Cadwalader
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In an Interpretive Letter, the OCC affirmed the authority of a national bank or federal savings association to hold stablecoin reserves for customers, subject to certain conditions. The OCC emphasized that its interpretation (i) applies only to the use of stablecoins backed by only one fiat currency on a 1:1 basis, where the reserve account is verified at least daily by a bank to ensure that the account balance is always equal to or greater than the issuer's outstanding stablecoins, and (ii) does not address stablecoin transactions that involve un-hosted wallets.

Additionally, the OCC clarified that financial institutions holding stablecoin reserves for their customers are required to:

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