The Federal Reserve of the United States plans to address the ambiguities that, in its opinion, affect the regulation of digital assets in the country, after a quick analysis between government agencies.
In a November 23 announcement, The Board of Governors of the Federal Reserve System said it recently worked with the Federal Deposit Insurance Corporation and the Office of the Comptroller of the Currency on a series of “policy sprints” aimed at addressing regulatory clarity in the crypto space. . The interagency effort included building a greater understanding of the terminology surrounding crypto assets, identifying potential risks, and analyzing existing regulatory frameworks to determine if any changes are necessary.
According to the Fed, in 2022 the three agencies plan to address whether “certain activities related to cryptocurrencies carried out by banking organizations are legally permissible”, in addition to potentially adjusting the rules of compliance and application of existing laws and regulations related to custody services, the purchase and sale of cryptocurrencies, loans collateralized by cryptocurrencies, HODLing and the issuance of stablecoins. ANDThe trio also intends to consult with the Basel Committee on Banking Supervision, a global committee of banking supervisors and central banks that provides recommendations for banks considering holding cryptocurrencies.
“The emerging crypto asset sector presents potential opportunities and risks for banking organizations, their clients and the financial system in general,” The Fed said. “The inter-agency sprints advanced rapidly and were based on the combined knowledge of the agencies, which helped to identify and assess key issues related to potential crypto-asset activities conducted by banking organizations.”
The announcement follows a report on November 1, President’s Task Force on Financial Markets suggesting that legislation is “urgently” needed to address potential financial risks of stablecoins. At present, there is an apparent legislative tug of war between US government agencies in regulating the cryptocurrency space, with much of the force behind the Securities and Exchange Commission and the Commodity Futures Trading Commission.
About half of the seats on the Federal Reserve Board of Governors could be filled with fresh blood starting in 2022 following the expected departure of Richard Clarida. On November 22, President Joe Biden announced that he would appoint Jerome Powell to a second term as Fed chairman, which could last until 2026.
However, as Powell is a current member of the council, there are likely to be three empty seats left for the US president to fill during his first term. On Monday, the White House said that Biden intended to announce his elections for those positions, as well as for the Fed vice presidency, for oversight, in early December, with the goal of “improve diversity in the composition of the Board.”
The Senate Banking Committee announced today that Powell would testify alongside Treasury Secretary Janet Yellen at a hearing on Nov.30 to address Fed and Treasury oversight on the Coronavirus Economic Relief, Relief and Security Act. . However, to be confirmed as the next Fed chairman, Powell will still have to attend a hearing before the same committee before the Senate can vote on his nomination.
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