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U.S. regulators exploring part that banks could play in the Crypto space

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Joyashree Dey Follow

INDIA

Oct, 28 2021

Oct, 28 2021

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An interagency group of U.S. banks controllers, specifically the Federal Deposit Insurance Corporation (FDIC), the Federal Reserve, and the Office of the Comptroller of the Currency, are focusing to give a more clear way to banks and their customers that are hoping to hold cryptocurrencies forms of money, to keep authority over the fast-developing asset.

Federal Deposit Insurance Corporation (FDIC) Chair Jelena McWilliams, one of the nation's top monetary controllers, told Reuters in a meeting on Monday that a group of U.S. bank controllers is attempting to give a roadmap to banks to engage in with crypto assets.

McWilliams believes it's an ideal opportunity to permit banks to hold cryptocurrency, like Bitcoin, for them as well as their customers. "I think that we need to allow banks in this space, while appropriately managing and mitigating risk," she said in a meeting with Reuters at the Money20/20 conference in Las Vegas.

Also Read | FDIC is looking for reserve and deposit insurance for Stablecoins

That could include more clear guidelines over holding cryptocurrency in custody to work with customer exchanging, utilizing them as a guarantee for loans, or in any event, holding them on their balance sheets like more conventional assets.

McWilliams said in an interview on the sidelines of a fintech conference, "If we don't bring this activity inside the banks, it is going to develop outside of the banks. ... The federal regulators won't be able to regulate it."

McWilliams' remarks give the fullest picture yet of what controllers are investigating as a component of a cryptocurrency "sprint" group originally declared in May. McWilliams' remarks come as an interagency group that included staff at the FDIC, the Federal Reserve, and the Office of the Comptroller of the Currency (OCC) hope to wrap up their work on planning cryptocurrency policies for U.S. banks.

"My goal in this interagency group is to basically provide a path for banks to be able to act as a custodian of these assets, use crypto assets, digital assets as some form of collateral," McWilliams said at the event.


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Joyashree Dey

CBW - External Analyst

INDIA

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