US Banking Regulators Set to Clarify Crypto Rules in 2022

The Federal Reserve, the Federal Deposit Insurance Corporation (or FDIC), and the Office of the Comptroller of the Currency (OCC) have published a joint statement outlining a plan to clarify the laws and regulations surrounding the usage of cryptocurrencies by banks over the next year (via Bloomberg).

The agencies say they’re concentrating on setting expectations for what banks can do in terms of holding crypto, allowing customers to obtain crypto, issuing their own stablecoins (or cryptocurrencies whose value is tied to a fiat currency like the US dollar), and accepting crypto as collateral for loans while keeping it on their balance sheets.

The purpose, according to the letter, is to ensure that customers are protected and banks operate properly. It’s also an attempt, according to the authorities, to ensure that the banking industry isn’t being used to launder ill-gotten gains, something the Treasury Department has been focused on recently.

The OCC has already taken steps in this approach, with the acting comptroller issuing a letter on Tuesday outlining judgments made by the office in 2020 and early 2021. Banks will now have to get authorization from regional authorities before entering some crypto areas, according to the letter.

The Comptroller previously stated that banks were permitted to retain cryptocurrencies for clients as well as assets used to back stablecoins. Banks were also warned that stablecoins might be used to operate as nodes on blockchain networks. While financial institutions will be free to continue to engage in these activities, they will need to demonstrate to regulators that they can do so safely and responsibly.

These statements come as some crypto businesses argue with regulators over the legal classifications their goods should be classified under. After a public fight with the Securities and Exchange Commission over whether what it was offering classified as securities, Coinbase recently suspended its Lend program (and would therefore fall under heavier legal scrutiny). The Treasury has also requested Congress to begin regulating stablecoins and has recommended that big cryptocurrency transfers be reported to the Internal Revenue Service.

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