The Federal Reserve, the Federal Deposit Insurance Corporation (or FDIC) and the Office of the Comptroller of the Currency (OCC) have issued a joint statement announcing a plan to clarify the rules and regulations regarding how banks can use cryptocurrencies over the next years (via Bloomberg).
Agencies say they focus on setting expectations for what banks can do when it comes to holding crypto, allowing customers to obtain crypto, issuing their own stack coins (or cryptocurrencies whose value is pegged to a fiat currency). as the US dollar), and take crypto as collateral for loans and keep it on their balances. According to the letter, the aim is to ensure that consumers are protected and that banks act responsibly. Regulators also say it is an attempt to ensure that the financial industry is not used to launder poorly acquired currency, something the Treasury has focused on recently.
The OCC has already taken steps in this direction – on Tuesday, the acting inspector issued a letter clarifying decisions that the office had made throughout 2020 and early 2021. Now, the letter says, banks will have to ask for permission from regional regulators before entering certain crypto fields.
Earlier, the Comptroller said banks were allowed to hold cryptocurrencies for customers as well as assets used to support stack coins. Banks were also told that they could use stack coins and act as nodes on blockchain networks. While financial institutions will still be able to carry out these activities, they must be able to prove to regulators that they can do so safely and responsibly.
These announcements come as some crypto companies have teamed up with regulators about what legal classifications their products fall under. Coinbase recently canceled its lending program following a public feud with the Securities and Exchange Commission over whether what it sold counts as securities (and therefore would fall under heavier legal control). The Treasury Department has also proposed that major cryptocurrency transfers be reported to the Internal Revenue Service, and has asked Congress to begin regulating stack coins.