The Federal Reserve, Federal Deposit Insurance coverage Company (or FDIC), and Workplace of the Comptroller of the Forex (OCC) have issued a joint statement asserting a plan to make clear the foundations and rules round how banks can use cryptocurrencies over the following 12 months (via Bloomberg).
The companies say they’re specializing in setting expectations for what banks can do in the case of holding crypto, permitting clients to acquire crypto, issuing their very own stablecoins (or cryptocurrencies whose worth is tied to a fiat forex just like the US greenback), and taking crypto as collateral for loans and conserving it on their stability sheets. In response to the letter, the objective is to ensure shoppers are protected and that banks act responsibly. The regulators additionally say it’s an try to ensure the monetary trade isn’t used to launder ill-gotten forex, one thing the Treasury Division has been specializing in not too long ago.
The OCC has already made moves in this direction — on Tuesday, the appearing comptroller released a letter clarifying choices that the workplace had made all through 2020 and early 2021. Now, the letter says, banks must ask permission from regional regulators earlier than moving into sure crypto fields.
Beforehand, the Comptroller stated banks have been allowed to hold cryptocurrencies for customers in addition to assets being used to back stablecoins. Banks were also told they may use stablecoins and act as nodes on blockchain networks. Whereas monetary establishments will nonetheless be capable of perform these actions, they’ll have to have the ability to show to regulators that they’ll accomplish that safely and responsibly.
These bulletins come as some crypto firms have skirmished with regulators over what authorized classifications their merchandise fall below. Lately, Coinbase canceled its Lend program after a public feud with the Securities and Change Fee over whether or not what it was promoting counted as securities (and would due to this fact fall below heavier authorized scrutiny). The Treasury has additionally proposed that enormous cryptocurrency transfers be reported to the Inside Income Service, and has requested Congress to start out regulating stablecoins.