Cryptocurrency prices jumped Monday evening as digital asset markets reacted positively to a letter published by the U.S. Office of the Comptroller of the Currency (OCC) approving U.S. banks to use public blockchain networks.
Ether jumped nearly 12% on the letterâ€™s release, given Ethereumâ€™s dominance as a stablecoin payment settlement protocol. Bitcoin also gained 5% and both leading cryptocurrencies almost fully retraced Sunday eveningâ€™s losses.
â€œAfter a flurry of negative regulatory news, investors are pleased to see positive regulatory news allowing Stablecoins and public blockchain integration into the traditional banking sector,â€ said Justin Yashouafar, managing partner at Santa Monica-based Blockhead Capital.
The letter addressed national banks and federal savings associations participating as nodes on a blockchain and storing or validating payments made in native digital assets or stablecoins.
The OCCâ€™s letter stands in contrast to a proposed bill that would require stablecoin issuers to obtain bank charters, That aggressively anti-stablecoin proposal resulted in hundreds of thousands of donations to be send to leading cryptocurrency advocacy group Coin Center.
In mid December, the Treasury Department proposed enhanced know-your-customer (KYC) rules on U.S. cryptocurrency users hoping to transfer their holdings from an exchange to their own personal wallets.
Yashouafar noted bitcoin and etherâ€™s positive reactions Monday were followed by price jumps from native tokens for other stablecoin-supporting networks, like Algorand and Solana, both of which support the two largest stablecoins: tether (USDT) and Circleâ€™s USDC stablecoin. Yet while the prices of ether and algorand â€œreacted immediately to the news,â€ Yashouafar pointed out that Solanaâ€™s had not.
Bitcoin has gained nearly 13% already in 2021 at last check, trading hands above $32,500. Ether is trading just below $1,100, roughly 25% below its record high of $1,448.