OCC Confirms National Banks Can Use Stablecoins and Run Blockchain Nodes

The OCC published Interpretive Letter 1174 on January 4, 2021, formally confirming that national banks and federal savings associations are authorized to use independent node verification networks (blockchains) and stablecoins to conduct payment activities and other bank-permissible functions. The letter builds on prior OCC guidance around digital asset custody and establishes that banks may validate, store, and record payment transactions by serving as nodes on distributed ledger networks. It also clarifies that banks may issue stablecoins or use stablecoins issued by third parties in connection with payment activities.

This guidance is particularly significant for the BaaS and embedded finance ecosystem, as it provides regulatory certainty for banks that wish to integrate stablecoin-based payment rails into their service offerings for fintech partners. The letter positions the OCC as a proactive regulator in the crypto-banking intersection, potentially encouraging more banks to build or offer blockchain-based BaaS capabilities. Financial terms were not applicable as this was a regulatory guidance issuance rather than a commercial transaction.