Federal Reserve rolls out new guidelines for crypto-focused banks

KanawatTH

• The U.S. Federal Reserve has released guidelines for depository institutions considering cryptocurrency-related activities, according to a supervisory letter Tuesday.
• While the emerging crypto space presents potential opportunities to the financial system, "crypto-asset-related activities may also pose risks related to safety and soundness, consumer protection, and financial stability," the Fed said.
• Banks overseen by the Fed should notify the central bank before pursuing crypto-focused activities. They must also determine the legality of such activities and assess whether any regulatory filings will be required.
• In addition, banks "should have adequate systems and controls in place" to conduct those activities safely.
• The move comes a day after the Fed issued guidance for how it will review requests from financial institutions to access its accounts and payment services.
• Lenders that have at least considered offering crypto-focused services include Silvergate Capital (SI), Customers Bancorp (CUBI), Metropolitan Bank (MCB) and SVB Financial (SIVB).
• In July, Fed's Brainard said crypto regulation needed "now" before it's too late.