Wednesday, January 26

The cryptocurrency oversight roadmap is set by the US banking regulators.

US banking agencies provided more information about their plans to regulate cryptocurrencies on Tuesday, issued a to-do list of their priorities for the coming year, and announced a new policy that would require banks to request permission before offering products. of digital currency.

The Federal Reserve and other banking agencies released an agenda outlining areas of focus, including how they plan to weigh custody, crypto-backed lending and the possibility of capital standards, according to a joint statement. Separately, the Office of the Comptroller of the Currency said banks must obtain additional approval from the regulator before committing to digital currencies.

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“Throughout 2022, the agencies plan to provide greater clarity on whether certain crypto-asset-related activities by banking organizations are legally permitted,” said the Fed, the Office of the Comptroller of the Currency and the Federal Deposit Insurance Corporation in the notice.

While the agenda does not affect any current regulations, the issues officials said they want to clarify next year could shape how agencies ultimately regulate how banks use cryptocurrencies. Its “cryptoassets roadmap” overlaps with the moves the OCC made in 2020 to open up banking to digital currencies when Brian Brooks was in charge of the agency, although current interim comptroller Michael Hsu halted those efforts.

After concluding what they called a “crypto sprint” to study how agencies were approaching crypto, banking regulators decided on several areas that need clarification. Those issues include how banks should properly maintain custody of crypto assets, what businesses should do to help consumers transact, how stablecoins should be issued, and what capital and liquidity standards should be for crypto holdings. from lenders.

The OCC followed up the release of the roadmap with a new policy on how banks should interpret its previous crypto directives. Hsu’s agency directed the banks it regulates to seek prior approval before they can manage custody of digital currencies, retain dollars deposited to back stablecoins, and handle crypto transactions tied to a distributed ledger, which is the technology that sustains the industry. Lenders will need to apply for a special permit and show they have sufficient risk controls before the OCC approves, according to the agency.

Following its 2022 roadmap and other recent recommendations, the OCC and other agencies could soon be weighing new rules to regulate tokens more like bank assets. The President’s Task Force on Financial Markets wants Congress to pass legislation that requires stablecoins to only be issued by regulated banks. The group of agency heads has also asked government supervisors to assess whether the tokens pose risks to the broader financial system.

Still, it is unclear whether the three banking agencies will be able to agree on something in the short term. The OCC is still awaiting confirmation of a permanent leader, and the Biden administration has yet to nominate a vice president to lead the Fed’s oversight work. Meanwhile, the FDIC is still led by a person appointed by the Trump administration, Jelena McWilliams.

© 2021 Bloomberg

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