The Federal Reserve, Federal Deposit Insurance coverage Company (or FDIC), and Workplace of the Comptroller of the Foreign money (OCC) have issued a joint statement saying a plan to make clear the foundations and laws round how banks can use cryptocurrencies over the following yr (via Bloomberg).
The businesses say they’re specializing in setting expectations for what banks can do in the case of holding crypto, permitting prospects to acquire crypto, issuing their very own stablecoins (or cryptocurrencies whose worth is tied to a fiat foreign money just like the US greenback), and taking crypto as collateral for loans and conserving it on their stability sheets. In keeping with 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 foreign money, one thing the Treasury Division has been focusing on recently.
The OCC has already made moves in this direction — on Tuesday, the performing comptroller released a letter clarifying selections that the workplace had made all through 2020 and early 2021. Now, the letter says, banks should ask permission from regional regulators earlier than stepping into sure crypto fields.
Beforehand, the Comptroller mentioned banks had 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 will accomplish that safely and responsibly.
These bulletins come as some crypto firms have skirmished with regulators over what authorized classifications their merchandise fall underneath. Just lately, Coinbase canceled its Lend program after a public feud with the Securities and Exchange Commission over whether or not what it was promoting counted as securities (and would due to this fact fall underneath heavier authorized scrutiny). The Treasury has additionally proposed that enormous cryptocurrency transfers be reported to the Internal Revenue Service, and has asked Congress to start regulating stablecoins.