Traditional Banks in the USA Will take a Call on their Role in Bitcoin Economy in 2022

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Key takeaways:

  • On Tuesday, US banking regulators said they intend to clarify in 2022 what role traditional banks may legally play in the Bitcoin business.
  • The authorities stated that the fast expansion of cryptocurrencies poses possible possibilities and threats for traditional banks, but did not provide any further specifics. 
  • Before engaging in any crypto-related activity, OCC-supervised institutions should contact the appropriate OCC supervisory office.
Traditional Banks In The Usa Will Take A Call On Their Role In Bitcoin
Traditional Banks in the USA Will take a Call on their Role in Bitcoin

US banking authorities said on Tuesday that they plan to clarify in 2022 what role traditional banks may lawfully play in the cryptocurrency sector.

Regulators stated in a statement that they want to clarify what kinds of operations banks may do with cryptocurrency, such as keeping it on their balance sheets, issuing stablecoins and holding crypto assets, and facilitating crypto trading on behalf of clients, among other presently opaque areas.

The Federal Reserve, the Federal Deposit Insurance Corporation, and the Office of the Comptroller of the Currency have issued a joint statement providing an update on the activities of an interagency “sprint” team that met earlier this year.

The authorities stated that the fast expansion of cryptocurrencies poses “potential opportunities and risks” for traditional banks, but did not provide any information. Regulators, they added, seek to offer “coordinated and timely” clarification to the institutions they oversee.

The Office of the Comptroller of the Currency (OCC), the Board of Governors of the Federal Reserve System (Board of Governors), and the Federal Deposit Insurance Corporation (FDIC) (collectively, the agencies) released a joint statement summarising the interagency “policy sprint” on crypto-assets1 and announcing several initiatives to provide greater clarity on permissibility, safety and soundness, consumer protection, and compliance with existing laws and regulations related to crypto-asset-re

The OCC is treating cryptocurrency-related activity in the federal banking system with extreme caution and expects its monitored institutions to do the same.

“The agencies have identified a number of areas where additional public clarity is warranted,” the agencies stated. “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.”

Officials from the agency have been examining the concerns that banks face when engaging in the crypto activity, as well as if existing rules need to be revised to account for it.

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Aadrika Sharma

I enjoy writing and try to learn new things every passing day!