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The Federal Reserve announced today that it will not block state-chartered banks offering depository services for crypto-assets. This groundbreaking decision comes as more and more financial institutions are looking for ways to get involved in the crypto space.
The Fed stressed that 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. This is a significant development for the crypto industry, as it signifies 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, for both insured and non-insured banks supervised by FRB.
A 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 supervised by the Office of the Supervision of 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 carry out their operations in a safe and responsible manner.
FRB Approach To Crypto Asset Activity
In recent years, the Board has been approached by many banks to participate in new and unusual activities, including activities involving crypto assets. In response, the Board has clarified its approach to evaluating this request according to established procedures.
This measure does not prevent member country banks or potential applicants from offering safekeeping services while complying with anti-money laundering and anti-terrorist financing regulations.
FRB’s approach to crypto asset activity is one of cautious optimism. While the Council acknowledges the potential benefits of crypto assets, it also recognizes the potential risks.
In addition, the statement reiterates that:
Banks must have appropriate and adequate risk management processes, internal controls and information systems for the nature, scope and risks of their 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 can grow in a safe and sound manner.
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