The U.S. Federal Reserve (the Fed) included cryptocurrencies in rules prohibiting certain officials from trading financial assets.
In the initial version, the restrictions covered only stocks, bonds and derivatives.
In addition to cryptocurrencies, the new version of the document adds commodities, foreign currencies and sector index funds. A ban on short positions and on the use of margin funding is introduced.
The rules will take effect on 21 October for current staff and 21 April for new hires. They are aimed at “maintaining public trust in the impartiality and integrity of the agency by preventing conflicts of interest.”
The scandal, sparked by deals of the heads of the FRB Boston and Dallas, Eric Rosengren and Robert Kaplan, before the introduction of emergency measures to support the economy during the COVID-19 pandemic. The officials subsequently resigned.
The restrictions cover members of the FOMC, presidents of regional banks and officials including HR managers, bond-trading department heads and staff who attend meetings of the Open Market Committee. Similar rules will also apply to their family members.
“The Fed expects that additional staff will fall under all or part of these rules after the review and analysis are completed,” the press release said.
From July 1, the aforementioned categories of personnel will be able to transact in assets not listed in the mandate, but with a 45-day notice. The holding period will be limited to one year. The relaxation will not apply during periods of heightened stress in financial markets. The definition of this term will be provided later by the chair of the Fed and the board’s chief legal counsel.
Earlier, Wyoming Senator Cynthia Lummis proposed for the Fed to direct a portion of its foreign-exchange reserves to buy digital gold.
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