Crypto Markets Jump on OCC Approval for Banks to Use Blockchains

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Cryptocurrency prices rose Monday night after the US office of the Comptroller of the Currency (OCC) issued a letter authorizing US banks to use public blockchain networks.

Ether rose nearly 12% when the letter was released as Ethereum dominates as the stable payment protocol for coins. Bitcoin was also up 5%, and both leading cryptocurrencies tracked the losses almost entirely on Sunday night.

“After a flood of negative regulatory news, investors are excited about positive regulatory news that will enable Bitcoin and public blockchain to become stable in the traditional banking sector,” said Justin Yashouafar, managing partner at Blockhead Capital in Santa Monica.

The letter was addressed to national banks and federal savings banks, which participate as nodes in a blockchain and save or validate payments in native digital assets or stablecoins.

The OCC’s letter contrasts with a bill introduced at the last session of Congress that would have required stable coin issuers to receive bank deeds. This aggressive proposal against a stable coin resulted in donations totaling hundreds of thousands of dollars that were sent to the leading cryptocurrency advocacy group, Coin Center.

In mid-December, the Treasury Department proposed expanded know-your-customer (KYC) rules for U.S. cryptocurrency users hoping to move their holdings from an exchange to their own personal wallets.

Yashouafar noted that the positive responses from Bitcoin and Ether on Monday were followed by jumps in the price of domestic tokens for other stable coin supporting networks such as Algorand and Solana, both of which support the two largest stable coins: Tether (USDT) and Circle’s USDC stablecoin.

While the prices for Aether and Algorand “reacted immediately to the news,” Yashouafar pointed out that Solana did not.

Bitcoin has already gained almost 13% in the last check in 2021 and is trading with hands over 32,500 USD. Ether trades just under $ 1,100, around 25% off its record high of $ 1,448.