US federal agencies release joint statement on crypto asset risks and safe practices

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The Fed, FDIC and OCC teamed up to privation the banks they modulate a FUD-filled caller twelvemonth with a informing astir the risks associated with crypto assets and their efforts to incorporate those risks.

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United States national slope regulatory agencies started disconnected the caller twelvemonth with a connection connected crypto assets that looked backmost astatine the troubles of the crypto assemblage successful 2022. The Federal Reserve, Federal Deposit Insurance Corporation (FDIC) and the Office of the Comptroller of the Currency (OCC) released a associated connection Jan. 3 connected past problems and their efforts to support dependable banking practices successful spite of those challenges.

“It is important that risks related to the crypto-asset assemblage that cannot beryllium mitigated oregon controlled bash not migrate to the banking system,” the agencies stated. They identified 8 circumstantial risks that diagnostic fraud, volatility, contagion and akin acquainted issues.

Related: Approach with caution: US banking regulator’s crypto warning

The agencies besides noted that, “Banking organizations are neither prohibited nor discouraged from providing banking services to customers of immoderate circumstantial people oregon type, arsenic permitted by instrumentality oregon regulation,” but took purpose squarely astatine the assemblage with a stark warning:

“Based connected the agencies’ existent knowing and acquisition to date, the agencies judge that issuing oregon holding arsenic main crypto-assets that are issued, stored, oregon transferred connected an open, public, and/or decentralized network, oregon akin strategy is highly apt to beryllium inconsistent with harmless and dependable banking practices.”

The connection hinted astatine the authorities of crypto regularisation successful the United States and the anticipation of it changing with references to agencies’ “case-by-case approaches to date”:

“Through the agencies’ case-by-case approaches to date, the agencies proceed to physique knowledge, expertise, and knowing of the risks crypto-assets whitethorn airs to banking organizations, their customers, and the broader U.S. fiscal system.”

All of the banking regulatory agencies person expressed misgivings astir crypto before. Their attitudes are not monolithic, however. A typical of the FDIC has spoken positively of stablecoins, for example. The OCC has taken steps precocious to engage much actively with fintech, and the Fed has taken an active, if noncommittal, involvement successful cardinal slope integer currency.

1/ The Federal Reserve, the FDIC and the OCC conscionable released this devastating Joint Statement connected Crypto-Asset Risks to Banking Organizations.

— Margaret Rosenfeld (@RosenfeldM) January 3, 2023

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