The United States Federal Reserve Board introduced Jan. 27 that it was issuing a policy assertion on limitations on banks. The policy seeks to create a stage enjoying area and limit regulatory arbitrage for state banks with deposit insurance coverage, state banks with out deposit insurance coverage and nationwide banks, that are overseen by the Office of the Comptroller of the Currency (OCC), by permitting them the identical scope of permissible activities.
The new policy will limit the activities of state banks by not permitting them to have interaction in activities not permitted by nationwide banks until state laws permits it. In the Federal Register discover, the assertion particularly discusses crypto at size. It acknowledged:
“The Board has not identified any authority permitting national banks to hold most crypto-assets […] As principal in any amount, and there is no federal statute or rule expressly permitting state banks to hold crypto-assets as principal. Therefore, the Board would presumptively prohibit state member banks from engaging in such activity under section 9(13) of the [Federal Reserve] Act.”
The discover additionally mentioned that state banks have proposed issuing “dollar tokens” — that’s, stablecoins — and people banks now will likely be topic to OCC interpretative letters 1174 and 1179, as are nationwide banks. It added:
“The Board generally believes that issuing tokens on open, public, and/or decentralized networks, or similar systems is highly likely to be inconsistent with safe and sound banking practices.”
The assertion was issued on the identical day that the Fed rejected the appliance of Wyoming’s Custodia Bank for Federal Reserve System membership.
Related: OCC makes its workers out there for fintech-related discussions
The Fed beefed up scrutiny on banks partaking in crypto activities in August 2022, when it issued a letter requiring the banks it oversees to disclose plans that embody crypto, with a reminder to guarantee sufficient danger administration. The letter utilized retrospectively to banks already energetic in crypto.
@federalreserve points policy assertion to promote a stage enjoying area for all banks with a federal supervisor, no matter deposit insurance coverage standing: https://t.co/ms40zhoYUY
— Federal Reserve (@federalreserve) January 27, 2023
