U.S. banking agencies have issued a to-do list of their plans to tackle oversight of the cryptocurrency industry next year.
In an agenda released on Tuesday, the Federal Reserve and other regulators outlined what issues they plan to focus on as they consider rules for how banks interact with cryptocurrencies. Their priorities include weighing custody, crypto-backed loans and the possibility of capital standards, according to a joint statement.
“Throughout 2022, the agencies plan to provide greater clarity on whether certain activities related to crypto-assets conducted by banking organizations are legally permissible,” the Fed, Office of the Comptroller of the Currency and Federal Deposit Insurance Corp. said in the statement.
While the announcement doesn’t affect any current regulations, the topics officials said they want to clarify could shape how the agencies ultimately regulate the way banks use crypto. Their “crypto-asset road map” overlaps with moves the OCC made in 2020 to open up banking to digital coins when Brian Brooks was in charge of the agency, though current Acting Comptroller Michael Hsu paused those efforts.
After concluding what they called a “crypto sprint” to study how agencies were approaching crypto, the banking regulators settled on several areas they need to clarify. Those issues include how banks should properly maintain custody of crypto assets, what firms should do to help consumers make transactions, how stablecoins should be issued and what capital and liquidity standards should be for lenders’ crypto holdings.
New rules could become particularly important as officials consider ways to regulate tokens more like bank assets. The President’s Working Group on Financial Markets wants Congress to take up legislation requiring that stablecoins only be issued by regulated banks. The group of agency heads has also called for government overseers to assess whether tokens pose risks to the wider financial system.
Still, it’s uncertain whether the three bank agencies will be able to agree on anything in the near term. The OCC is still awaiting the confirmation of a permanent leader, and the Biden administration hasn’t yet nominated a vice chairman to run the Fed’s supervision work. Meanwhile, the FDIC is still run by a Trump administration appointee, Jelena McWilliams.
— By Jesse Hamilton