- The Fed has published updated guidance for accountable financial counterparties.
- This is a clarification on the regulator’s supervisory policy that directly affects dollar-stablecoin transactions.
- According to it, before engaging in such activities, a bank must obtain appropriate authorization from the agency.
The U.S. Federal Reserve Board (Fed) has published updated guidance for banks on dealing with cryptocurrency business. Specifically, the regulator required counterparties to obtain prior authorization before conducting transactions in stablecoins.
“The goal of the new supervisory program is to take advantage of financial innovation while identifying and appropriately addressing risks to ensure the safety and soundness of the banking system,” the regulator said in a press release. </nbsp;
The guideline is Form SR 23-8 / CA 23-5. In fact, it is an authorization from the Fed for transactions to hold, buy and sell dollar-stablecoins.
To receive it, a counterparty must prove to the regulator that it has effective crisis management measures, sufficient reserves and compliance with anti-money laundering (AML) policies.In February 2023, the Federal Reserve issued guidance to the banking segment on the potential risks of the cryptocurrency sector.
Already in March, three major U.S. financial counterparties that partnered with cryptocurrency companies collapsed. They are Sillicon Valley Bank, Signature and Silvergate.
The U.S. Finance Ministry said the liquidation of these banks has nothing to do with the digital asset segment. The Blockchain Association, however, believes otherwise.