Crypto-asset ‘policy sprints’ among Fed, FDIC, OCC produce ‘roadmap’ for future work

A so-called roadmap for providing greater public clarity throughout 2022 on issues surrounding banking institutions’ involvement in crypto-assets was released as part of a joint statement Tuesday by federal banking agencies.

“As supervised institutions seek to engage in crypto-asset-related activities, it is important that the agencies provide coordinated and timely clarity where appropriate to promote safety and soundness, consumer protection, and compliance with applicable laws and regulations, including anti-money laundering and illicit finance statutes and rules,” according to the statement by the Federal Reserve, Federal Deposit Insurance Corp. (FDIC), and Office of the Comptroller of the Currency (OCC).

The joint statement was anticipated in recent speeches by the acting comptroller of the currency, Michael Hsu, who has said the OCC will also release a report on its recently concluded review of crypto-related interpretive letters.

In Tuesday’s joint statement, the agencies said their roadmap for future work related to crypto-assets grew out of a set of staff-level, interagency “policy sprints” that focused on developing a commonly understood vocabulary regarding banking organizations’ use of crypto-assets; identifying and assessing key risks (safety and soundness, consumer protection, and compliance) and considering legal permissibility related to potential crypto-asset activities; and analyzing the applicability of existing regulations and guidance and identifying areas that could be further clarified.

Specific activities reviewed included crypto-asset custody; facilitation of customer purchases and sales of crypto-assets; loans collateralized by crypto-assets; activities involving payments, including stablecoins; and activities that may result in the holding of crypto-assets on a banking organization’s balance sheet.

The agencies said that as a result of this work, their efforts throughout 2022 will focus on providing clarity regarding whether certain activities related to crypto-assets are legally permissible, expectations for safety and soundness, consumer protection, and compliance with existing laws and regulations related to the following:

  • Crypto-asset safekeeping and traditional custody services.
  • Ancillary custody services.
  • Facilitation of customer purchases and sales of crypto-assets.
  • Loans collateralized by crypto-assets.
  • Issuance and distribution of stablecoins.
  • Activities involving the holding of crypto-assets on balance sheet.

In this instance, traditional custody services in this instance include facilitating the customer’s exchange of crypto-assets and fiat currency, transaction settlement, trade execution, recordkeeping, valuation, tax services, and reporting, according to a footnote in Tuesday’s statement.

The agencies said they also will evaluate the application of bank capital and liquidity standards to crypto-assets for activities involving U.S. banking organizations “and will continue to engage with the Basel Committee on Banking Supervision on its consultative process in this area.”

They continue to monitor developments in crypto-assets and may address other issues as the market evolves, the agencies noted.

Agencies issue joint statement on crypto-asset policy initiative and next steps