All banks supervised by the Federal Reserve will be subject to the same limitations on activities, including novel banking activities like crypto-asset-related activities – regardless of their deposit insurance status, the agency said in a policy statement released Friday.
The agency said the statement was issued to “promote a level playing field for all banks with a federal supervisor, regardless of deposit insurance status.”
In addition, the Fed said, its statement clarifies that uninsured and insured banks supervised by the Fed would be subject to the limitations on certain activities imposed on national banks overseen by the Office of the Comptroller of the Currency (OCC). “The equal treatment will promote a level playing field and limit regulatory arbitrage,” the Fed said.
“Banks must both ensure that the activities they engage in are allowed under the law, and conduct their business in a safe and sound manner,” the agency statement said. “For instance, a bank should have in place risk management processes, internal controls, and information systems that are appropriate and adequate for the nature, scope, and risks of its activities.”
The agency statement takes effect immediately upon publication in the Federal Register, according to the Fed.
The origin of the statement seems to emanate from a recent spate of what the Fed described as “inquiries, notifications, and proposals from banks regarding potential engagement in novel and unprecedented activities, including those involving crypto-assets.”
The Fed said the statement specifies how it will evaluate such inquiries, consistent with longstanding practice. However, the agency said the statement does not prohibit a state member bank, or prospective applicant, “from providing safekeeping services, in a custodial capacity, for crypto-assets if conducted in a safe and sound manner and in compliance with consumer, anti-money laundering, and anti-terrorist financing laws.”