US banking regulators to prepare cryptocurrency guidance in 2022

Fed, FDIC and OCC as part of the U.S. Treasury Department determined a number of areas related to the regulation of digital assets that require further clarification. The interagency sprint began in May and will continue into 2022.

The result of these efforts will be to delineate the responsibilities of each regulator and to establish a mechanism for cooperation. Consultations with the Basel Committee on Banking Supervision are anticipated.

To date, the agencies have developed an agreed glossary of terms, identified key risks, and analyzed how existing rules and guidelines could be applied.

The group intends to issue guidance on the types of activities banks may undertake legally in relation to cryptocurrencies.

The guidance will also reflect expectations regarding safety and reliability, consumer protection, and compliance with existing laws and regulations relating to:

• custody of cryptocurrencies and traditional custodial services;
• facilitating the purchase and sale of digital assets by clients;
• cryptocurrency-backed lending;
• issuance and distribution of stablecoins;
• on-balance-sheet custody of digital assets.

Earlier in October, media reported that the FDIC could extend insurance coverage of $250 000 to deposits in ‘stablecoins’.

In November, the President’s Working Group on Financial Markets released a report, in which it listed the risks associated with stablecoins and recommended treating asset issuers as banks.

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