The U.S. Federal Reserve Board is starting a new program to oversee the crypto activities in the banks. It also mentioned that the banks under its authority should get approval before engaging in digital assets activities.
The new program launched on August 8, which states the central bank would integrate the program into its existing supervisory process, designating program experts to work alongside those teams supervising banks engaged in novel activities.
Novel activities include complex, technology-driven partnerships with non-banks to provide banking services to customers; and activities that involve crypto-assets and distributed ledger or “blockchain” technology, according to Fed.
The board said, “The goal of the novel activities supervision program is to foster the benefits of financial innovation while recognizing and appropriately addressing risks to ensure the safety and soundness of the banking system.”
With this announcement, the Fed gives information that banks should follow the process before engaging in dollar token or stablecoin activities. The firms performing these activities have to endure Fed that it will conduct the ‘safely and soundly.’
In January, the central bank announced some policy statements, which are part of this ongoing work and give clarity to all parties as services and related technologies continue to evolve.
Also Read: Federal Reserve Chair Powell on Stablecoin: A Form of Money?