Federal Reserve Introduces New Program for Crypto Oversight
The U.S. Federal Reserve has announced a new program for overseeing banks’ cryptocurrency activities, providing more clarity on its expectations. Here are the key points:
– The program, called the “novel activities supervision program,” will involve the Fed’s specialized experts in digital assets working alongside regular supervisors to oversee dealings with the crypto sector.
– Banks under the Fed’s authority will need to obtain approval before engaging in digital asset activities, including stablecoin issuance, holding, or transacting in dollar tokens.
– To obtain approval, banks must demonstrate their ability to identify, measure, monitor, and control the risks associated with their activities, including vulnerabilities to money laundering, customer runs, and hackers.
– The new program aims to reinforce the crypto guidance issued by the Fed in January and maintains a substantial barrier between the banking system and the crypto sector.
– The level of supervision will vary based on the level of engagement in novel activities by each supervised banking organization.
Closing paragraph: The introduction of the novel activities supervision program by the Federal Reserve demonstrates the regulator’s commitment to overseeing the crypto sector while allowing for innovation in financial services. Banks will now have clearer guidelines and requirements to follow when engaging with digital assets, ensuring a safer and more regulated environment for crypto activities.
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