Technology

Federal Reserve issues guidance for banks considering crypto activities

The U.S. Federal Reserve on Tuesday issued additional guidance for banks considering activities involving cryptocurrencies, emphasizing that firms must notify the Fed beforehand and make sure whatever they do is legally permitted. The Fed said in a statement that while cryptocurrencies could present “potential opportunities” to banks, firms needed to make sure they had systems in place beforehand to ensure the volatile assets did not threaten safety and soundness or consumer protections. Banks should also notify the Fed before engaging in any crypto-related activities, and any banks that had already pursued crypto initiatives should also notify the Fed about their involvement in the digital asset space, the agency said. The Fed also encouraged state member banks to alert their state regulator before getting involved in crypto activities. The Fed said in the supervisory letter that banks supervised by the agency should take several steps before engaging in any crypto-related activities, including determining if existing laws dictated any particular filings and whether any activities under consideration were legally permissible.

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