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According to FDIC Chairman, US officials are exploring to establish a clearer way for banks and their clients who want to own cryptocurrencies, like Bitcoin to maintain over the rapidly increasing asset.
FDIC Chairman says, US Banks Are Exploring How Banks Could Hold Bitcoin
In an interview with Reuters, Jelena McWilliams, chairman of the Federal Deposit Insurance Corporation (FDIC), said that a group of US bank regulators is attempting to establish a road map for banks to deal with crypto assets.
This might include clearer guidelines for storing cryptocurrency in custody to enable client trading, using it as collateral for loans, or even accounting for it as a regular asset on their balance sheets.
“I think that we need to allow banks in this space, while appropriately managing and mitigating risk,” she said in an interview on the sidelines of a fintech conference. If we don’t bring this activity inside the banks, it is going to develop outside of the banks. … The federal regulators won’t be able to regulate it.”
McWilliams’ remarks give an adequate picture yet of what authorities are investigating as a part of the cryptocurrency “sprint” squad, which was initially disclosed in May.
The team’s purpose was to establish the cryptocurrency policy cooperation across the three major US bank regulators - the FDIC, the Federal Reserve, and the Office of the Comptroller of the Currency.
Rapid Growth of Cryptocurrencies Create Confusing Regulatory Scenarios in the US
The fast rise of cryptocurrencies has created a hazy regulatory landscape in the United States.
The OCC adopted an active strategy to integrate Bitcoin into banks under former leadership, including endorsing bank custody services for cryptocurrencies, although other authorities were reluctant to respond.
According to interim Comptroller Michael Hsu, those choices are currently being reviewed.
Some banks have already begun to dabble in these areas in the absence of regulatory certainty. U.S. Bancorp (USB.N) announced earlier this month the introduction of a Bitcoin custody service for institutional investment managers.
However, McWilliams' comments, a Republican holdover from the Trump administration, indicate that regulators are still looking for a method to include Bitcoin into standard bank monitoring.
"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," McWilliams stated on a conference panel.
At some point in time, we're going to tackle how and under what circumstances banks can hold them on their balance sheet."