Fed Launches New Program To Monitor Crypto Activity In U.S. Banks
The U.S. Federal Reserve is launching a new program to monitor all crypto activities in local banks, and it has clarified its requirement that lenders under its authority must obtain approval before engaging in digital asset operations.
The move does not change any existing crypto banking rules, rather, it defines how the central bank intends to handle its oversight, placing dealings with the crypto sector under the new novel activities supervision program. Through this, the Fed will assign specialized experts in digital assets who will work alongside the regular supervisors.
The Fed also provided a more detailed explanation of how the banks it supervises must obtain pre-approvals before dealing with stablecoins. An institution that is issuing, holding, or transacting in dollar tokens to facilitate payments must first demonstrate to supervisors that it can do so in a safe and sound manner, and the Fed must formally approve it.
So far, U.S. banking regulators have been clear that they intend to maintain a substantial barrier between the crypto industry and the banking system, however they also insist that lenders are welcome to continue experimenting under their close supervision.
According to the Fed, the level and intensity of supervision shall greatly vary based on the level of engagement in novel activities by every supervised banking organization.
Concurrently, the central bank stated that its new initiative would help ensure that both regulation and supervision allow for innovations which can greatly enhance access to and delivery of various financial services.
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