The Fed just announced that it will launch a new supervisory program for financial institutions that engage in crypto-related activities such as trading, custody, lending or payments.
The new Fed supervisory program will focus on activities related to crypto, blockchain technology, non-bank technology partnerships.
The Fed says state member banks must obtain written approval from the Fed before issuing, holding, or transacting with dollar tokens.
The full cryptocurrency statement shared by the FED:
The Federal Reserve Board provided additional information on Tuesday about its program of monitoring new activities at banks it oversees. New activities include complex, technology-driven partnerships with non-bank organizations to provide banking services to customers; cryptoassets and activities involving distributed ledger or “blockchain” technology.
The purpose of the new activities supervision program is to promote the benefits of financial innovation while recognizing and appropriately addressing risks to ensure the safety and soundness of the banking system. The program will be integrated into the Federal Reserve’s existing audit processes, and program specialists will work with existing audit teams to audit banks engaged in new activities.
Also on Tuesday, the Board provided additional information on the process a Federal Reserve-regulated state bank must follow before engaging in certain dollar token or stablecoin operations, including demonstrating to Federal Reserve supervisors that it has appropriate safeguards to run the business safely and soundly.
Today’s announcements are part of the Federal Reserve’s ongoing work to create greater clarity for all parties as financial services and related technologies continue to evolve.
