US regulators are trying to develop guidelines for commercial banks intending to start working with cryptocurrencies.
Jelena McWilliams, who chairs the Federal Deposit Insurance Corporation (FDIC), told Reuters that a group of US banking regulators is trying to provide banks with a plan for dealing with cryptoassets. Such recommendations are intended to clarify for banks the acceptable forms of storage and circulation of cryptocurrencies in the interests of customers. It is expected that the result of the discussion will be the publication of clearer rules for the storage of cryptoassets, their trading and the possibility of using them as collateral for loans.
“I think that we need to allow banks in this space, while appropriately managing and mitigating risk. If we don’t bring this activity inside the banks, it is going to develop outside of the banks. … The federal regulators won’t be able to regulate it.”
The cryptoasset regulation working group was established in the United States in May 2021. It included specialists from the FDIC, the Federal Reserve System (FRS) and the Financial Control Department.
Meanwhile, despite the lack of a clear regulatory framework, a number of US banks, such as US Bancorp, have already launched crypto asset custody services for institutional investors.
According to McWilliams, the problem of crypto storage standard is the simplest one. The most controversial issue is the use of an unstable asset as collateral for a loan, as well as the problem of including and reflecting cryptoassets in bank balances.
“The issue there is … valuation of these assets and the fluctuation in their value that can be almost on a daily basis,” McWilliams said. “You have to decide what kind of capital and liquidity treatment to allocate to such balance sheet holdings.”