On September 21, 2020, the US federal prudential banking
regulator Office of the Comptroller of the Currency
("OCC") published a letter (the "OCC
Guidance") regarding US federal banks' and
thrifts' authority to hold funds which function as reserves for
stablecoins.
As noted in the OCC Guidance, stablecoins are a type of
cryptocurrency backed by another asset such as a fiat currency,
commodity, another cryptocurrency, or other assets "with
values that are pegged to a fiat currency or managed by
algorithm". The OCC Guidance specifically focuses on
stablecoins which are "backed by a single fiat currency and
redeemable by the holder of the stablecoin on a 1:1 basis".
The OCC Guidance only addresses transactions in which stablecoins
are held in a hosted wallet and not an un-hosted or personal wallet
held by the owner of a stablecoin.
