FDIC wants US banks to report on current and planned crypto-related activities

FDIC wants US banks to report on current and planned crypto-related activities


2022-04-14 18:37:15

The U.S. bank insurer has concerns about the ability of the institutions it oversees to assess cryptocurrency risks adequately and is uncertain about its own capabilities.

The Federal Deposit Insurance Corporation, the U.S. government company that insures depositors at U.S. commercial and savings banks, issued a letter to the financial institution on Wednesday. Five. Letter requesting institutions designated by the supervisory authority to notify the appropriate regional director of their activities with crypto-related assets or their intention to engage in crypto-related activities death.

According to the letter, “It is difficult for institutions, as well as the FDIC, to fully assess safety and soundness, financial stability, and consumer protection impacts without considering each activity involved. to cryptocurrencies on an individual basis.”

As such, the FDIC wants to receive all necessary information to “engage with the institution regarding the relevant risks” resulting from its current or intended crypto-related activity and to “provide a related supervisory feedback to the FDIC-supervised organization, if appropriate, in a timely manner.” Organizations are encouraged to liaise with regulatory authorities simultaneously.

The note advises that institutions “should be able to demonstrate their ability to conduct crypto-related activities in a safe and sound manner.” Descriptions of the risks faced by organizations, broken down into safety and soundness, financial stability and consumer protection categories, make up the bulk of the content of the picture.

The FDIC partnered with the Office of the Comptroller of the Currency on a crypto-asset-focused “sprint policy” last year, and in November they released a statement of their findings, in The agencies outlined a “plan to provide greater clarity on whether certain activities involving crypto-assets by banking institutions are permitted and expected by law.” health and safety, consumer protection, and compliance with applicable laws and regulations. ”

In February, New Jersey Representative Josh Gottheimer released his draft of the Stablecoins Innovation and Protection Act of 2022. If passed, the law would designate stablecoins to be issued by regulated custodial institutions. certain insurance or non-bank issuers are “eligible” and require the FDIC to establish a Qualified Stablecoin Insurance Fund.

US President Joe Biden’s executive order on Ensuring Responsible Development of Digital Assets listed the FDIC chair among officials who are “encouraged to consider the extent to which investor protections Investors and markets in their respective jurisdictions may be used to address the risks of digital assets and whether additional measures may be needed”.

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