In Brief:
- U.S. regulators are developing clear guidelines for banks that deal with crypto Assets.
- FDIC plans to issue a series of policy statements in coming months.
- McWilliams points out benefits and risks involved with crypto assets and stablecoins.
The head of U.S regulators said that they are working towards developing clear guidelines for banks that deal with crypto.
In her speech at money 20/20, FDIC Chairman Jelena McWilliams said “As a regulator, my job is not to make predictions about the future of crypto assets. My job is to provide clear rules of the road – to allow innovation to flourish, while mitigating risks”.
Mcwilliams also said “If we fail to do this, we risk stifling innovation and for how and under what circumstances banks can engage in activities involving crypto assets.”
For several months, the FDIC has been involved with the Federal Reserve and the office of the Comptroller of the currency in what some have called a “crypto spirit,”. All these agencies are coordinating policies for how and under what circumstances banks can engage in activities involving crypto assets.
“My objective is to provide clear guidance to the public on how our existing rules and policies apply to crypto assets, what types of activities are permissible for banks to engage in, and what supervisory expectations we have for banks that do engage in such activities. We plan to issue a series of policy statements in coming months,” McWilliams said.
Over the past couple of years, the use of stablecoins increased and it has various other potential uses. When it comes to stablescoins Mcwilliams said “That oversight should rest on the foundation that stablecoins issued from outside the banking sector are truly backed 1:1 by safe, highly liquid assets.”
“We must be cognizant of, such as ensuring operational resilience and preventing money laundering. Establishing clear regulatory expectations will be paramount to give the market an opportunity to grow and mature in a responsible manner,” McWilliams said.
In May, Mcwilliam was in a conversation about a possible “Interagency sprint team” on cryptocurrency regulation related to banking. Joint effort to generate a united framework and definition for cryptocurrency is already progress involving the OCC, Fed and FDIC.
