White paper: The legal right of banks to issue stablecoins is clear | Media Pyro

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Issuing digital currency and engaging in stablecoin-related activities falls within the legal jurisdiction of banks, according to a white paper published today by The Library. The payment company analyzed the legal status of the introduction of banks into the stablecoin by focusing on two OCC letters from 2020 and 2021, which stated that banks can participate in the do cryptocurrency if they first show their authority. Despite that fact, “government regulators have banned state-regulated banks from offering stablecoins and other services related to digital assets,” according to the white paper.

The right to issue and exchange stablecoins is based on the language in the National Bank Act and in accordance with many legal decisions and legal decisions on the right of the bank to issue payments and financial instruments , the authors wrote. In addition, national banks have been allowed to develop depository and payment methods, since taking deposits and acting as financial intermediaries are the main functions of banks.

“Customers have explained that they find value in holding and paying using stablecoins,” the authors wrote. “Because of this, federal bank regulators must choose between one of two options: allow banks to begin issuing stablecoins within federal regulatory jurisdiction, or continue to issue the non-banking entities to meet this consumer demand without government oversight.From a risk management perspective, managers must carefully select the former.

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