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US Regulators Looking at How Banks Could Hold Crypto Assets: Report

US Regulators Looking at How Banks Could Hold Crypto Assets: Report


A team of US regulators is exploring how banks could hold and deal with digital assets.

According to a report from Reuters, regulators are working to create clearer rules for banks to facilitate client trading of crypto, using it as collateral, as well as holding it on their balance sheets.

 

Jelena McWilliams, Chair of the Federal Deposit Insurance Corporation (FDIC), said banks should be allowed into the space while appropriately mitigating risk.

“If we don’t bring this activity inside the banks, it is going to develop outside of the banks. [Then] the federal regulators won’t be able to regulate it.”

Though it hasn’t been confirmed as the same initiative, Federal Reserve Vice Chair of Supervision Randal Quarles revealed in May that his organization, along with the FDIC and the Office of the Comptroller of the Currency (OCC), were on a “sprint” to regulate crypto.

While speaking at the Money 20/20 conference in Las Vegas, McWilliams said her role in the initiative was primarily focused on how banks interact with the industry.

“My goal in this interagency group is to basically provide a path for banks to be able to act as a custodian of these assets, use crypto assets, digital assets as some form of collateral…

At some point in time, we’re going to tackle how and under what circumstances banks can hold them on their balance sheet.”

McWilliams also said that the easiest issue to tackle would be laying out a roadmap for letting banks take custody of digital assets, but acknowledged that the volatility in crypto poses difficulties.

“The issue there is… valuation of these assets and the fluctuation in their value that can be almost on a daily basis… You have to decide what kind of capital and liquidity treatment to allocate to such balance sheet holdings.”

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Disclaimer: Opinions expressed at The Daily Hodl are not investment advice. Investors should do their due diligence before making any high-risk investments in Bitcoin, cryptocurrency or digital assets. Please be advised that your transfers and trades are at your own risk, and any loses you may incur are your responsibility. The Daily Hodl does not recommend the buying or selling of any cryptocurrencies or digital assets, nor is The Daily Hodl an investment advisor. Please note that The Daily Hodl participates in affiliate marketing.

Featured Image: Pixabay/ahobbit





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