An interagency team of the regulators of the United States called FDIC (Federal Deposit Insurance Corporation), the OCC (Office of the Comptroller of the Currency), and the Federal Reserve are mutually thinking over a suitable regulatory roadmap to enable the banks to integrate crypto into the service offerings thereof. Indistinct rules in the case of holding crypto for the facilitation of customer trading, utilizing them to be collateral for mortgages, as well as holding them as assets on the balance sheets thereof, are the problems currently tackled on behalf of the regulators.
Nonetheless, the matter of cryptocurrencies’ volatility makes it hard to figure out how to utilize them to be collateral, as well as incorporating them on the balance sheets of the banks. Mitigation, and Risk management, as per McWilliams, count to be the chief factors in the case of banks’ move towards their functioning in this field. Some of the banks have in advance begun dabbling, like Goldman Sachs and JP Morgan, during the currently prevailed regulatory Murkiness.
The stance of FDIC concerning crypto
The FDIC admitted that some unique and novel considerations were there relating to the digital assets during the 2021’s May. It began collecting information and comments regarding the consumer interests of the industry across the digital assets after the early interest of the banks as well as the contribution in the ecosystem of virtual assets. During a talk in 2019, Ms McWilliams stated that the complete system of central banking could probably be disrupted via utilizing cryptocurrencies. She focused her wish for the FDIC that it should not approve something that it is not confident about, as well as she does also not want to dishearten the innovation.
The probable insurance of crypto deposits
FDIC is responsible for liquidating the bank loans as well as the other such assets at the time of the failure of a bank in the United States. Recently, FDIC collaborated with Anchorage (a company for crypto custody). The firm will assist it in liquidating the crypto assets of the banks, along with selling and storing Bitcoin (BTC) as well as the other virtual assets, if a bank failure is witnessed. It is up till now ambiguous whether the FDIC will consider the mechanisms for investor protection in the case of investing with Gemini or Coinbase.