Lawmakers and regulators should adhere to the principle of “same activity, same risk, same regulation” when developing a framework for digital asset regulation, seeking to apply existing financial system safeguards to the digital asset ecosystem and filling in gaps with new legislation, ABA said this week.
When it comes to crypto assets, banking regulators seek to strike a balance between providing enough room for technological innovation to flourish while protecting consumers from a sector that has proven susceptible to fraud, Federal Reserve Vice Chairman for Supervision Michael Barr said this week.
The collapse of cryptocurrency exchange FTX happened in an international regulatory vacuum that allowed the firm to hide fraudulent activity and operate with a “stunning” lack of basic risk management controls, Acting Comptroller of the Currency Michael Hsu said this week.
Rep. Patrick McHenry (R-N.C.) and Sen. Cynthia Lummis (R-Wyo.) this week asked the banking agencies for clarification regarding an April 2022 staff accounting bulletin issued by the Securities and Exchange Commission.
“Banks continue to lead the way in responsible innovation in the financial services sector while nonbank crypto firms continue to collapse,” ABA and BPI wrote.
Banking regulators this week issued a joint statement reminding financial institutions of their risk management obligations should they offer depository services for crypto assets.
The Financial Stability Board this week laid out several steps it will take in the future to evaluate and possibly reduce the financial stability risks posed by decentralized finance, or defi.
Crypto is still an outlier in the product line for many banks. But a few have made big commitments.
Banks and other financial institutions must engage in a safe and sound manner in any activity they do, and that includes dealing in cryptocurrency, Federal Reserve Governor Christopher Waller said this week.
The Federal Reserve this week released guidelines for how it would evaluate requests from state-charted but non-FDIC-insured financial institutions seeking to engage in novel activities, such as those involving cryptoassets.