WASHINGTON (Reuters) – U.S. banks should search and acquire written permission from their financial institution supervisors earlier than partaking in sure actions involving cryptocurrency, a serious regulator stated on Tuesday.
The Workplace of the Comptroller of the Forex stated banks should have the ability to display they’ve applicable threat administration instruments earlier than taking over actions like offering custody companies for patrons’ crypto holdings.
“As a result of many of those applied sciences and merchandise current novel dangers, banks should have the ability to display that they’ve applicable threat administration programs and controls in place to conduct them safely,” stated performing Comptroller Michael Hsu in a press release.
The brand new stance from the regulator locations a better bar on banks contemplating some crypto actions, after the company underneath former President Donald Trump cleared the best way for banks to interact in some crypto work.
Beneath the brand new interpretive letter, banks will not be allowed to interact in a number of crypto-related actions, akin to offering custody for crypto property and utilizing greenback deposits and reserves to again “stablecoins,” with out first notifying their financial institution supervisors of their intention to interact in that exercise.
Supervisors will then assessment the financial institution’s threat administration instruments and programs, and permit the exercise provided that banks display they’ll achieve this in a protected and sound method.
A separate joint assertion from the Federal Reserve, Federal Deposit Insurance coverage Company and the OCC issued on Tuesday stated banking regulators intend to make clear in 2022 what function conventional banks can legally play within the cryptocurrency market.
(Reporting by Pete Schroeder; Enhancing by Dan Grebler)
