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Fed, FDIC, OCC Clarify How Banks Can Handle Your Crypto
In a joint statement issued yesterday, the Federal Reserve (Fed), Federal Deposit Insurance Corporation (FDIC), and Office of the Comptroller of the Currency (OCC) have clarified how banks can offer custody services for cryptocurrencies. The statement does not introduce new policies but instead provides guidance on existing rules.
According to the regulators, banks can provide crypto-custody services as long as they manage risks associated with such activities in a manner consistent with traditional financial products. This means that banks must have clear plans in place to handle cybersecurity threats, protect private keys, and keep sensitive data secure before offering such services.
The statement emphasizes the importance of adapting risk frameworks to accommodate the evolving nature of the crypto market. Banks are expected to maintain strong oversight and ensure that their internal controls are robust enough to address any emerging risks.
Additionally, the Fed has announced that it will no longer consider “reputational risk” as a supervisory factor. This change could have significant implications for banks’ relationships with cryptocurrency businesses.
In recent months, each of these agencies has taken steps to allow greater crypto adoption by banks. The OCC previously stated that national banks can buy and sell digital assets for their own portfolios, while the FDIC clarified that banks do not need to notify them before starting crypto services.
These developments collectively create a more favorable environment for banks to engage in crypto-related activities such as trading, custody, and settlement. Industry experts suggest that this joint statement represents an effort towards providing clear and consistent rules for financial institutions.
The appointment of Jonathan Gould, who has experience working with blockchain companies and holding senior roles at the OCC, may signal further increased involvement by regulators in the cryptocurrency space.
As interest in digital assets continues to grow, it is likely that banks and regulatory agencies will need to work closely together.
Source: cryptopotato.com
