OCC alleviates concerns about the impact of stablecoin on the banking system

The head of the U.S. Office of the Comptroller of the Currency (OCC), Jonathan Gould, stated at the annual conference of the American Bankers Association (ABA) on October 19 that any significant impact of stablecoins on deposits “will not happen abruptly or be overlooked.”

This statement aims to reassure concerns from banking associations — including the ABA and more than 50 state-level organizations — that are calling on Congress to close the “loopholes” that allow third parties to provide yields on stablecoins.

The stablecoin market has increased from 205 billion USD at the beginning of the year to over 302 billion USD, while many companies like Coinbase, Circle, Paxos, and Ripple are applying for federal banking licenses. Gould believes that instead of viewing stablecoins as a threat, community banks should see them as a tool to compete with the “big players” on Wall Street and expand digital payment capabilities.