• Markets
  • Crypto
  • Web3
  • Culture
  • Opinion
  • Politics
Subscribe
  • Login
  • Register
No Result
View All Result
  • Markets
  • Crypto
  • Web3
  • Culture
  • Opinion
  • Politics
No Result
View All Result
No Result
View All Result

Fed Allows Banks to Crypto

04/01/2023 19:21
No comments

In a joint statement that aims to highlight crypto risks, the Federal Reserve Banks nonetheless made it clear that commercial banks can provide crypto related services.

“Banking organizations are neither prohibited nor discouraged from providing banking services to customers of any specific class or type, as permitted by law or regulation,” the Federal Reserve Banks said alongside other entities that supervise commercial banks as well as the monetary system.

They did however point out that actually holding crypto is “highly likely” to be unsound, stating:

“Based on the agencies’ current understanding and experience to date, the agencies believe that issuing or holding as principal crypto-assets that are issued, stored, or transferred on an open, public, and/or decentralized network, or similar system is highly likely to be inconsistent with safe and sound banking practices.”

The word ‘holding’ tends to mean having possession of the private keys. If instead someone else provides custody, like for Revolut for example, arguably the bank itself is not actually holding the assets, the custodian is ‘holding.’

In addition, although the word ‘highly likely’ clearly indicates that they shouldn’t, it is not an actual prohibition.

If therefore these banks adopt safe and sound practices, like securing insurance if they’re actually holding or using an insured custodian, it appears that based on this statement they are free to provide crypto services.

That follows a greenlight by the Bank for International Settlement (BIS), which tends to supervise central banks, allowing commercial banks to hold between 1% and 2% of their tier 1 capital in crypto.

BIS said banks might use crypto as a hedge, and they provided no limit if the crypto is a stablecoin.

Following these developments, we’re likely to hear a lot more on this ‘safe’ integration between cryptos and the established financial system, including banks.

They are starting to merge, and sooner or later banks that provide trading services for stocks, commodities, or bonds, will add crypto if they are to keep up with Fintechs or challenger banks.

The Fed statement clearly allows them to do so where it concerns cash settled bitcoin futures, like those provided by CME, but the bitcoin-finance space is getting a lot more sophisticated and is likely to develop further in that direction.

As such, from this statement it appears the issuer of fiat will not quite stand on their way, with the banking system so potentially starting to become crypto neutral.

Related Posts

Arbitrum opening price, March 2023

Arbitrum Gifts $1.7 Billion to the Public

Bitcoin art, March 2023

Stocks Jump 2%, Bitcoin Close to Touching $29,000

Coinbase Dives 15%

Goldman Sachs and JP Morgan Can’t Survive Bank Run Says NBER Paper, Fail Stress Test

Load More
  • Trending
  • Comments
  • Latest
The National Bureau of Economic Research

Goldman Sachs and JP Morgan Can’t Survive Bank Run Says NBER Paper, Fail Stress Test

Paul Grewal, Coinbase's Chief Legal Officer

We Asked SEC to Register, They Sent Us a Wells Notice Says Coinbase

NY District Court

XRP Hypes Ahead of Court Decision

Bitcoin and asset prices dive, March 2023

Bitcoin and Stocks Dip on Fed Hikes, But is it a Fakeout?

Arbitrum opening price, March 2023

Arbitrum Gifts $1.7 Billion to the Public

Bitcoin art, March 2023

Stocks Jump 2%, Bitcoin Close to Touching $29,000

Brian Armstrong getting ready for court. The words are a joke, but the picture is him for real, March 2023

Coinbase Dives 15%

The National Bureau of Economic Research

Goldman Sachs and JP Morgan Can’t Survive Bank Run Says NBER Paper, Fail Stress Test

Comments

Latest News

  • Arbitrum Gifts $1.7 Billion to the Public
  • Stocks Jump 2%, Bitcoin Close to Touching $29,000
  • Coinbase Dives 15%

About Trustnodes

Terms of Service

Privacy Policy

Our Ethics and Values

Trustnodes Newsletter

(You have to be a paid subscriber)

Trustnodes © 2017-2023. All Rights Fully Reserved. For any Enquiries contact@trustnodes.com RSS Feed

No Result
View All Result
  • Login
  • Sign Up
  • Cart
  • Markets
  • Crypto
  • Web3
  • Culture
  • Opinion
  • Politics

Trustnodes © 2017-2023. All Rights Fully Reserved. For any Enquiries contact@trustnodes.com RSS Feed

Welcome Back!

Login to your account below

Authenticate with MetaMask Loading...

Forgotten Password? Sign Up

Create New Account!

Fill the forms below to register

*By registering into our website, you agree to the Terms & Conditions and Privacy Policy.
All fields are required. Log In

Retrieve your password

Please enter your username or email address to reset your password.

Log In
This website uses cookies. By continuing to use this website you are giving consent to cookies being used. Visit our Privacy and Cookie Policy.
Are you sure want to unlock this post?
Unlock left : 0
Are you sure want to cancel subscription?