Jan 06, 2021
By: W. Sean Ford, COO, Algorand
This week the largest regulating body of banks in the US, The Office of the Comptroller of the Currency (OCC, @USOCC), issued forward looking interpretive guidance that clearly states US Banks may participate in node technology such as Algorand's, as well as use the technology’s related stablecoins, to create the necessary settlement infrastructure of the future—one that is secure, fast, and final.
This is an important step in opening the door for advances in global payments by recognizing that the current outdated legacy system should evolve to a network that is more efficient, modern, trustworthy and readily available. We believe this is a significant early indicator in how legacy infrastructures will evolve and eventually lead to our economies being powered by blockchain technology designed to facilitate the trusted exchange of economic value. In particular, as banks participate in blockchain-enabled ecosystems, users will be able to settle payments faster, at scale, with lower fees, and with greater accountability and transparency. Banks will be able to streamline financial transactions and offer consumers and businesses the instant transaction finality and compliance needed to advance and build inclusion in economies around the world.
Many of these transactions will be enabled by stablecoins, a form of programmable digital money. As an example, Algorand is one of the first blockchains with a stablecoin implementation powered by Circle’s USDC. Circle's platform has supported over 100 million transactions, worth tens of billions of dollars, with nearly 10 million retail customers, and over a thousand businesses. Circle has also stored and secured more than $5 billion in digital currency assets. In addition to USDC, Algorand has a wide range of supported stablecoins that includes licensed e-money in Euros, British pounds, and Icelandic krona (all from Monerium), Stablecorp’s QCAD (first fully-compliant Canadian-dollar stablecoin), USDT from Tether (the most widely traded stablecoin), Meld Gold (a gold-backed stablecoin), and more.
Algorand was designed specifically for this opportunity with Layer-1 core primitives that include the global scale, speed, security, finality, and advanced tools (such as Smart Contracts) required for a modern financial system. These capabilities allow developers to program sophisticated payment applications that can support billions of users in a truly secure and scalable manner. Our CEO, Steve Kokinos, recently stated in an OMFIF post titled How systems that foster trust will usher in a new payments era: “the new way of handling payments and sophisticated transactions paves the way for truly peer-to-peer transactions and more financial inclusion. It removes friction from financial exchange, providing more efficient and accessible ways of transacting between any party.” This is what Algorand delivers.