US regulators plan to release legal crypto ‘clarity’ for banks in 2022

US regulators will create a crypto ‘roadmap’ set to be released in 2022

Office of the Comptroller of Currency sign and logo, Washington, DC, US                                 
Office of the Comptroller of Currency sign and logo, Washington, DC, US – Photo: Alamy
                                

A trio of US bank regulators plans to “provide greater clarity” on whether certain crypto-asset activities undertaken by banks are legal by 2022.

The board of governors of the Federal Reserve System (the Fed), the Federal Deposit Insurance Corporation (FDIC) and the Office of the Comptroller of the Currency (OCC) have agreed to pursue this out of their joint realisation that cryptos “presents potential opportunities and risks for banking organisations”.

As more financial institutions are beginning to show interest in the crypto space, the agencies believe it is imperative to “provide coordinated and timely clarity” to ensure consumer protection.

The regulators also want to make sure these financial organisations comply with applicable laws, regulations and anti-money laundering (AML) rules.

Crypto asset ‘policy sprints’

In order to provide the needed clarity, the agencies conducted a series of “interagency ‘policy sprints’ focused on crypto assets”. This is when various relevant experineced staff from each of the agencies “conducted preliminary analysis” on matters relating to cryptos.

The focus of the policy sprints’ work includes ensuring institutions have developed a commonly understood vocabulary relating to the use of cryptos, as well as identifying key risks of cryptos relating to “safety, consumer protection and compliance” and, finally, studying the application of current existing regulations and “identifying areas that may benefit from additional clarification”.

The policy sprint work has so far reviewed and analysed the parts of the cryptosphere the agencies believe financial institutions and banks will be most interested in, such as crypto custody, customer purchase, and sale of cryptos and loans collateralised by crypto.  

Crypto ‘roadmap’

From the work conducted so far, the agencies “have identified a number of areas where additional public clarity is warranted”.

It is expected that at some point in 2022, the trio of US regulators will eventually create and publish a “roadmap” that will clarify whether and which activities relating to cryptos are legal and safe.

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