Fed: cryptocurrencies as an opportunity for banks

A few days ago a press release was published on the official website of the Federal Reserve (Fed), or the U.S. Central Bank, stating that crypto-assets are an opportunity for banks. 

The official statement came from the Federal Reserve Board and was addressed to banking organizations engaged in cryptocurrency-related activities. 

The Fed says cryptocurrencies are an opportunity for the banking system

It is a meager statement that nevertheless opens an unexpected glimmer in the difficult relationship between traditional and new cryptocurrency finance. 

They write: 

“The emerging crypto-asset sector presents potential opportunities for banking organizations, their customers and the financial system in general; however, crypto-asset activities may also pose risks related to safety and soundness, consumer protection and financial stability.”

It then cites a “supervisory letter” sent by the Fed itself to U.S. banks outlining the steps they should take before engaging in cryptocurrency-related activities. These activities include assessing the legal compliance of various projects, and any need to meet special regulatory requirements. 

In addition, the letter warns that banking organizations under the Board’s supervision should inform the Board before engaging in cryptocurrency-related activities.

With this letter in effect, the Fed is opening the door to cryptocurrencies in the traditional banking system, but setting stakes that should serve to prevent banks from becoming involved in the illicit or substandard business. 

Meanwhile, the Federal Deposit Insurance Corporation (FDIC) has sent more letters to five crypto companies for making false or misleading statements.

The companies to which these letters were addressed are FTX US, Cryptonews.com, Cryptosec.info, SmartAsset.com, and FDICCrypto.com. 

The letters asked the companies and their officials to cease and desist from making further false and misleading statements about FDIC deposit insurance, and to take immediate corrective action. 

In fact, the FDIC alleges that these companies have publicly made false statements stating or suggesting that some cryptocurrency-related products are FDIC-insured. 

Banks and the mass adoption of crypto

Thus, on the one hand, U.S. finance seems to be opening up more and more to the cryptocurrency world, with the approval of the authorities, while on the other hand, they are increasing scrutiny to verify that crypto operators in the U.S. are operating within the law. 

This trend could help cryptocurrencies enter the mainstream more and more broadly and thoroughly, slowly lifting that whiff of abuse or even criminality that they sometimes still carry. By now, it certainly seems that the mainstream has thrown its doors wide open to cryptocurrencies, as long as cryptocurrency operators comply with the strict rules of the mainstream itself.