US agencies unveil 'crypto sprint' roadmap as regulatory debate heats up – Yahoo Finance

U.S. financial regulators on Tuesday released an inter-agency policy agenda for regulating cryptocurrencies, as discussions unfold about how to provide oversight for the booming market.
The so-called “crypto sprint,” as officials call it, sketches out a to-do list for 2022 that will offer crypto players more clarity on the rules of the road.
It summarizes plans by the Federal Reserve, Federal Deposit Insurance Corp (FDIC) and Office of the Comptroller of the Currency (OCC) for which activities by banks in crypto are legal, and how financial players should comply with existing regulations on safety and soundness and consumer protection when it comes to crypto.
“The interagency sprints quickly advanced and built on agencies’ combined knowledge, which helped identify and assess key issues related to potential crypto-asset activities conducted by banking organizations,” regulators said in a statement.
Regulators will focus on oversight of how banks could store crypto assets safely, handling exchanging customers’ fiat currency for cryptocurrencies, and offering purchases of cryptocurrencies. The roadmap also covers settling and executing trades, loans backed by crypto assets, issuing stablecoins, tax services and whether to hold crypto assets on the balance sheet.
The agencies also will assess applying bank capital and liquidity requirements for holding crypto assets, noting that they’ll continue to consult with the Basel Committee on Banking Supervision on capital requirements.
The Basel Committee, part of the Bank of International Settlements, sets global standards for banking regulations. They’ve proposed two groups of capital requirements, including that cryptocurrencies like bitcoin should be subject to a higher risk weighting of 1250%.
Yet large banks, including JPMorgan Chase and Deutsche Bank oppose this capital level, calling it too conservative and could stop banks from being involved in the crypto market.
The agencies stated they’ll continue to monitor developments in crypto-assets and may address other issues as the market evolves.
“Regulators are promising actions that could probably impact decentralized finance and crypto trading,” says Jaret Seiberg, analyst with Cowen & Co. “It is broadly supportive of our view that regulators plan to treat crypto solutions the same as the product it is trying to replicate.”
Officials are laying out their initiatives in the crypto space after the President’s Working Group on Financial Markets issued recommendations recently on how to regulate stablecoins, tasking regulators with using their current authorities to regulate the sector. That’s now being translated to all of crypto.
As the regulators sketched out a broad outline of their plan to offer clarity on which crypto activities are legal for banks, the OCC, which oversees national banks, is clarifying that national banks and federal savings associations can engage in cryptocurrency activities — if they get approval from regulators. 
Few banks are engaging in crypto right now, but for those that aren’t, and want to do so going forward, will have to earn the agency's seal of approval.
The OCC says banks must demonstrate to regulators that they have proper risk management controls in place before they can deal in crypto. The agency said on Tuesday that institutions need to address risks of cryptocurrencies, including hacking, fraud, and theft, liquidity risk, anti-money laundering, sanctions requirements, and consumer protection laws for the agency to determine whether they can deal in crypto safely. After receiving approval, only then can the bank engage in crypto activities.
The OCC believes that providing cryptocurrency services is a modern form of traditional banking, and that banks are authorized to perform. Among permissible activities, the OCC has previously determined and is reiterating banks may hold deposits that serve as reserves for stablecoins that are backed on a 1:1 basis by a single fiat currency, and held in hosted wallets. 
Banks are also allowed to use distributed ledgers and stablecoins to help facilitate payments—that includes buying, selling, and issuing stablecoins to enable payments.
“Providing this clarity will help ensure that these cryptocurrency, distributed ledger, and stablecoin activities will be conducted by national banks and federal savings associations in a safe and sound manner,” Acting Comptroller Michael Hsu said Tuesday. “This will provide assurance that crypto-asset activities taking place inside of the federal regulatory perimeter are being conducted responsibly.”
As industry players stake out positions and try and influence the debate, Binance founder and CEO Changpeng Zhao said the cryptocurrency exchange wants to help regulators better understand the space, and offer proper protection to investors.
“It’s always a subjective judgement,” Zhao told Yahoo Finance. “I think crypto definitely, compared to stock markets, is still much more nascent. I think the industry has grown to a point where there are many smaller players who are less protective of their users and we would like to see more regulations in the space so the retail consumers are protected.”
Meanwhile, the vacancy for the vice chair of supervision on the Fed's Board of Governors could hold implications for crypto regulations. Senator Elizabeth Warren said the role “must be filled by a strong regulator with a proven track record of tough and effective enforcement – and it needs to be done quickly.” 
While regulators are putting their ideas out in a crypto sprint, President Joe Biden's pick for that position will get to influence the final outcome.
Read the latest financial and business news from Yahoo Finance
Read the latest cryptocurrency and bitcoin news from Yahoo Finance
Follow Yahoo Finance on Twitter, Instagram, YouTube, Facebook, Flipboard, and LinkedIn
The Justice Department filed a lawsuit on Tuesday seeking to block a major U.S. sugar manufacturer from acquiring its rival, arguing that allowing the deal would harm competition and consumers. It comes about eight months after U.S. Sugar announced it reached an agreement to acquire the Imperial Sugar Company, one of the largest sugar refiners in the nation. The lawsuit is the latest example of the Justice Department’s approach to aggressive enforcement of federal antitrust law that officials say is aimed at ensuring a fair and competitive market.
U.S. Senator Elizabeth Warren on Tuesday called on energy companies to explain "their decisions to export record amounts of natural gas while imposing massive price increases" on consumers, accusing them of "corporate greed" while Americans struggle to pay their bills. Warren sent letters to 11 energy companies, including Exxon Mobil, ConocoPhillips and Occidental Petroleum. "The cause of rapidly rising energy prices for consumers and manufacturers is clear: some of the nation's largest and most profitable oil and gas companies are putting their massive profits, share prices and dividends for investors, and millions of dollars in CEO pay and bonuses ahead of the needs of American consumers and the nation’s recovery from the pandemic," Warren wrote in letters sent to the companies and posted on her website.
Best Buy (BBY) shares tumbled on Tuesday despite third quarter results which beat estimates on the top and bottom lines.
El Salvador announces plans over the weekend to build the world's first 'Bitcoin City' funded by bitcoin-backed bonds.
WASHINGTON (Reuters) -U.S. banking regulators intend to clarify in 2022 what role traditional banks can legally play in the cryptocurrency market, they said on Tuesday. In a statement, regulators said they plan to make clear what sort of activities banks can engage in involving cryptocurrency, including holding it on their balance sheets, issuing stablecoins and holding crypto assets and facilitating crypto trading on behalf of customers, among other currently murky areas. The joint statement from the Federal Reserve, Federal Deposit Insurance Corporation and Office of the Comptroller of the Currency is an update on work done by an interagency "sprint" team convened earlier this year.
The panic selling reflects cryptocurrencies' increased popularity since the bill was first announced.
The Labor Department is set to release its jobless claims report Thursday.
Activision Blizzard has formed a committee to help it address the ongoing harassment scandal, but it's not likely to satisfy critics.
President Joe Biden has renominated Federal Reserve Chairman Jerome Powell for a second term as the head of the central bank, a sign of the administration’s approval of Powell’s leadership through the COVID-induced economic crisis.
(Bloomberg) — An Indian parliamentary panel has recommended treating social media platforms like Twitter and Facebook as publishers and setting up a regulatory body to oversee them, potentially opening the companies up to more liability for user-generated content. Most Read from BloombergAsia’s Richest Man Looks to Walton Family Playbook on SuccessionBillionaire Family Feud Puts a Century-Old Business Empire in JeopardyThe 24-Year-Old Aiming to Dethrone Victoria’s SecretThe Winners and Losers F
Putting money to work in cryptocurrencies remains far from a normal investing exercise, which is something people with grand visions (note this number of people is growing as cryptos reach the mainstream) of getting rich off of dogecoin or Shibu Inu in under 12 hours need to be reminded of consistently.
Su Zhu, CEO of Singapore-based hedge fund Three Arrows Capital Ltd, has ‘abandoned’ Ethereum due to its high gas fees.
It's Facebook versus decentralized autonomous organizations in the virtual world of the future.
Crypto remains unfamiliar territory for a lot of folks. Make sure the ones you love are in on the action, and by the time you sit down for Thanksgiving dinner next year, they’ll be thanking you. The post How to Field Your Family’s Questions About Crypto This Thanksgiving appeared first on Worth.
U.S. banking agencies are moving closer to regulating cryptocurrencies. Yahoo Finance's Jared Blikre details the latest.
The group plans next year to begin delineating how banks can legally get involved in the growing field.
2TM, the holding company for Mercado Bitcoin, Brazil’s largest crypto exchange by market valuation, is looking to become a leading provider of blockchain infrastructure services in Latin America.
The cryptocurrency's growing applications make it less susceptible to the interest rates.
Bitcoin (BTC) is starting to stabilize as altcoins such as ether (ETH) outperform. The rise in altcoins suggests a greater appetite for risk among traders as some indicators register short-term oversold readings.
El Salvador plans to build the world's first "Bitcoin City" with money from a $1 billion bitcoin-backed bond the country's President Nayib Bukele said on Saturday. Here is what we know about the proposed bond and some of the details that still need to be filled in. Bukele said El Salvador planned to issue the bond in 2022, suggesting it could be as soon as in 60 days time.

source

Leave a Comment

Your email address will not be published. Required fields are marked *