The Federal Reserve Board has issued a policy statement to promote a level playing field for all banks under its supervision, regardless of deposit insurance status. The statement clarifies that both uninsured and insured banks will be subject to the same limitations on activities, including those related to crypto-assets. The statement also reiterates that banks must ensure their activities are legal and conducted in a safe and sound manner, and specifies how the Board will evaluate inquiries about novel and unprecedented activities involving crypto-assets. The policy statement allows state member banks to provide safekeeping services for crypto-assets as long as it is conducted in a safe and sound manner and in compliance with relevant laws.
Regarding crypto the guidance says:
With respect to any novel and unprecedented activities, such as those associated with crypto- assets or use of distributed ledger technology, the proposed policy statement would note that it is particularly important for an SMB (i) to have in place appropriate systems to monitor and control risks, including liquidity, credit, market, operational, and compliance risks; and (ii) to be able to explain and demonstrate an effective control environment related to such activities.
We read this and the overall tone of the board policy statement to mean that no bank in the US, no matter who regulates it, will use crypto including stablecoins unless they have approval to do so and will have to show they have effective controls.
For more see: 23 Jan Federal Reserve Board Policy Statement
