FILE PHOTO: A representation of the virtual cryptocurrency Bitcoin is seen in this picture illustration taken October 19, 2021. REUTERS/Edgar Su
November 23, 2021
By Pete Schroeder
WASHINGTON (Reuters) -U.S. banking regulators intend to clarify in 2022 what role traditional banks can legally play in the cryptocurrency market, they said on Tuesday.
In a statement, regulators said they plan to make clear what sort of activities banks can engage in involving cryptocurrency, including holding it on their balance sheets, issuing stablecoins and holding crypto assets and facilitating crypto trading on behalf of customers, among other currently murky areas.
The joint statement from the Federal Reserve, Federal Deposit Insurance Corporation and Office of the Comptroller of the Currency is an update on work done by an interagency “sprint” team convened earlier this year.
While not providing details, the agencies said the rapid growth of cryptocurrency presents “potential opportunities and risks” for traditional banks. They said regulators want to provide “coordinated and timely” clarity to the institutions they monitor.
“The agencies have identified a number of areas where additional public clarity is warranted,” the agencies said. “Throughout 2022, the agencies plan to provide greater clarity on whether certain activities related to crypto-assets conducted by banking organizations are legally permissible, and expectations for safety and soundness, consumer protection, and compliance with existing laws and regulations.”
Agency officials have been working on identifying risks facing banks engaging in crypto activity, as well as whether existing regulations must be updated to account for that activity.
(Reporting by Pete Schroeder; Editing by Dan Grebler)