Three major US agencies – the Federal Reserve, the Federal Deposit Insurance Corporation and the Office of the Comptroller of the Currency – recently issued a joint statement. It lists the crypto activities that will be considered authorized for banking organizations.
The US regulatory framework in the field of cryptography has long been fragmented. This is the very reason why SEC Commissioner Hester Peirce rejected the idea of a new crypto regulator.
It should be noted that none of these watchdogs was part of the “political sprints” that have been carried out so far. The report focused on developing a common vocabulary for the banking industry as it relates to crypto-assets. Besides,
“Identify and assess the main risks… and take into account the legal eligibility related to potential crypto-asset activities carried out by banking organizations. “
This covers several aspects that include, but are not limited to, loans secured by crypto assets, stablecoins, and crypto holdings on the bank’s balance sheet.
In addition, as part of the roadmap, more clarity in this area is expected over the coming year. The statement also noted that relevant authorities, such as the Basel Committee on Banking Supervision, will be consulted on the outcome.
New rules for JP Morgan, BoA and others?
In a previous circular, the OCC made it clear that entering the crypto industry for US banks would not be easy.
Acting Controller Michael Hsu said in a statement:
“Because many of these technologies and products present new risks, banks must be able to demonstrate that they have the appropriate risk management systems and controls to conduct them safely. “
Essentially, this means that banks need written authorization from supervisors before entering the crypto business. However, greater clarity is expected on this rule within the framework of the “political sprints” initiative discussed previously.
With that, the next month promises to be busy for Congress as well.
– James K. Filan (@FilanLaw) 22 November 2021
Crypto congresses and companies
According to Ron Hammond, the House Financial Services Committee will listen to testimonials from several crypto CEOs on December 8. And crypto themes like stablecoins, DeFi, Bitcoin’s climate impact, its use cases, and volatility would be on the agenda.
Meanwhile, the ongoing crypto debate among congressional senators continues to intensify. Senator Sherrod Brown recently issued letters to crypto exchanges and stablecoin issuers for additional information on consumer protection.