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US banking regulators are looking to clarify crypto rules in 2022

US banking regulators are looking to clarify crypto rules in 2022


One of them is already working to make banks’ responsibilities clearer

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A stylized illustration of a Bitcoin in purple and black shadows.
Illustration by Alex Castro / The Verge

The Federal Reserve, Federal Deposit Insurance Corporation (or FDIC), and Office of the Comptroller of the Currency (OCC) have issued a joint statement announcing a plan to clarify the rules and regulations around how banks can use cryptocurrencies over the next year (via Bloomberg).

The agencies say they’re focusing on setting expectations for what banks can do when it comes to holding crypto, allowing customers to obtain crypto, issuing their own stablecoins (or cryptocurrencies whose value is tied to a fiat currency like the US dollar), and taking crypto as collateral for loans and keeping it on their balance sheets. According to the letter, the goal is to make sure consumers are protected and that banks act responsibly. The regulators also say it’s an attempt to make sure the financial industry isn’t used to launder ill-gotten currency, something the Treasury Department has been focusing on recently.

The OCC has already made moves in this direction — on Tuesday, the acting comptroller released a letter clarifying decisions that the office had made throughout 2020 and early 2021. Now, the letter says, banks will have to ask permission from regional regulators before getting into certain crypto fields.

Banks now have to show they can safely handle crypto

Previously, the Comptroller said banks were allowed to hold cryptocurrencies for customers as well as assets being used to back stablecoins. Banks were also told they could use stablecoins and act as nodes on blockchain networks. While financial institutions will still be able to carry out these activities, they’ll have to be able to prove to regulators that they can do so safely and responsibly.

These announcements come as some crypto companies have skirmished with regulators over what legal classifications their products fall under. Recently, Coinbase canceled its Lend program after a public feud with the Securities and Exchange Commission over whether what it was selling counted as securities (and would therefore fall under heavier legal scrutiny). The Treasury has also proposed that large cryptocurrency transfers be reported to the Internal Revenue Service, and has asked Congress to start regulating stablecoins.