The Federal Reserve announced today that it would not stand in the way of state-chartered banks offering safekeeping services for crypto-assets. This groundbreaking decision comes as a growing number of financial institutions are exploring ways to get involved in the crypto space.
The Fed emphasized that any such activities must be conducted in a safe and sound manner and must comply with all relevant consumer protection, anti-money laundering, and anti-terrorist financing laws. It is a significant development for the crypto industry, as it signals mainstream financial institutions’ growing acceptance of digital assets.
New Crypto-Asset Policy Statement
The Federal Reserve Board has introduced a new policy that ensures equal treatment for all banks under its supervision, whether they have deposit insurance or not. This policy applies the same restrictions on activities, including those related to crypto assets, to both insured and uninsured banks supervised by the FRB.
The new policy statement issued by the Federal Reserve Board emphasizes that all banks under its supervision, whether they have deposit insurance or not, will be subject to the same restrictions on certain activities as national banks overseen by the Office of the Comptroller of the Currency.
This will ensure a fair and level playing field and prevent regulatory loopholes. The statement also emphasizes that banks must comply with all relevant laws and conduct their operations in a safe and responsible manner.
FRB’s Approach To Crypto-Asset Activities
In recent years, the Board has been approached by multiple banks about participating in new and unusual activities, including those involving crypto-assets. In response, the Board has clarified its approach to evaluating these requests in accordance with established procedures.
This action does not prevent state member banks or potential applicants from offering safekeeping services while complying with anti-money laundering and anti-terrorist financing regulations.
The FRB’s approach to crypto-asset activities is one of cautious optimism. While the Board recognizes the potential benefits of crypto-assets, it also acknowledges the potential risks.
Additionally, the statement reiterates that:
A bank should have in place risk management processes, internal controls, and information systems that are appropriate and adequate for the nature, scope, and risks of its activities.
Overall, the Federal Reserve Board’s new policy statement is a positive step forward in promoting a level playing field for all banks while also ensuring that the crypto-asset market is able to grow in a safe and sound manner.
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