Fed Warns Banks Planning To Venture Into Cryptocurrency
The US Federal Reserve released on Tuesday an additional set of guidelines for banks that plan to conduct cryptocurrency activities. The agency emphasized the need for the financial institutions to notify them should they consider venturing into the digital asset space.
“The emerging crypto-asset sector presents potential opportunities to banking organizations, their customers, and the overall financial system; however, crypto-asset-related activities may also pose risks related to safety and soundness, consumer protection, and financial stability,” said the Fed in its statement.
The federal agency also warned banking organizations to ensure that the crypto activity they plan to engage in must be “legally permissible and [must] determine whether any filings are required under applicable federal or state laws.”
Banks should also notify their respective lead supervisory point of contact at the Fed before engaging in crypto-asset-related activities, while those already dealing crypto business should prompt their contacts immediately.
The Fed is also requiring banking institutions to have “in place adequate systems, risk management, and controls” prior to conducting said related activities.
The issued additional guidance is a continuation of the Fed’s increasing regulatory measures on the decentralized finance industry, following an interagency statement detailing “policy sprints” on the crypto asset space.
Information for this briefing was found via US Federal Reserve and the companies mentioned. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.
