US Federal Reserve Board issues the fundamental declaration that limits crypto -related activities of banks - regulation

The Association Board of the United States said on January 27 that both insured and non-insured banks will be subject to certain activities, including those associated with crypto assets. The most recent measure of the board does not prevent a state member bank or a potential applicant from offering crypto-asset protection services.

limitation of the regulatory arbitrage

The Federal Reserve Board of the United States has issued a new fundamental statement, in which it is said that both insured and non-insured banks are "subject to the same activity restrictions, including new banking activities in connection with crypto-assets".

The statement also makes it clear that the institutes are subject to the restrictions "certain activities", under the patronage of the office of the Compotroller of the Currency (OCC) fall. According to the declaration, the board of directors not only tries to "promote the same competitive conditions" by imposing limits for the activities of financial institutions, but also tries to "limit regulatory arbitration".

The fundamental declaration, which comes into force with the publication in the Federal Register, calls on the banks to ensure that their activities are correct and are carried out "in a safe and solid way". This can be achieved by setting up risk management processes, internal controls and information systems.

state member banks that are not prevented from offering services for the custodies of crypto-assets

On the reasons for the decision to issue the fundamental declaration, the Federal Reserve Board said that an increase in inquiries or proposals from financial institutions that would like to participate in non-traditional activities.

In recent years, the board has received a number of inquiries, notifications and proposals from banks regarding a possible participation in new and unprecedented activities, including those with crypto-assets. In response to this, the board explains how it will evaluate such inquiries, which corresponds to many years of practice.

In the meantime, the explanation made it clear that the recent measure of the board of directors does not prevent a state member bank or a potential applicant from offering services to maintain crypto-assets. This is only permissible if it is "carried out in a safe and solid way and in accordance with consumer, money laundering and terrorism financing laws".

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Terence Zimwara

Terence Zimwara is an award -winning journalist, author and writer from Zimbabwe. He wrote in detail about the economic problems of some African countries and how digital currencies Africans can offer an escape route.

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