OCC Issues Interpretation on Independent Node Verification Networks and Stablecoins

In an interpretive letter, the OCC clarified that banks may (i) serve as participants, or "nodes," in Independent Node Verification Networks ("INVNs") (e.g., distributed ledgers) and (ii) use related stablecoin transactions to conduct payment activities, as these new technologies are "merely a new means" of performing "repeatedly recognized" permissible banking functions (e.g., providing payments services and facilitating payments).

The OCC described an INVN as being comparable to established payment systems that use a centralized entity because, in function, the INVN transmits payment instructions and validates payments. With regard to stablecoin transactions, the OCC explained, stablecoins are electronic representations of fiat currency and function - like debit cards and checks - as a mechanism of payment.