US bank regulators are developing a ‘roadmap’ to allow banks to access cryptocurrencies, according to a report from Reuters.
Jelena McWilliams, chair of the Federal Deposit Insurance Corporation, said that the intention of the interagency group is to “provide a path for banks to be able to act as a custodian of these assets, use crypto assets, digital assets as some form of collateral”.
This would pave the way for banks to allow customer trading, use for collateral or potentially even hold them on the books akin to traditional assets.
“If we don’t bring this activity inside the banks, it is going to develop outside of the banks. …The federal regulators won’t be able to regulate it.”
SEC chairman, Gary Gensler, chose to leave all crypto regulations off the SEC policy agenda for 2021. However, as reported earlier today, Gensler has pushed for the SEC to provide regulation on stablecoins.
Putting a stop to this complicated regulatory approach will likely be the logic behind McWilliams’ announcement. Banks have already started to enter this territory despite lacking regulatory clarity.
US Bank, the fifth-largest retail bank in the US, launched a Bitcoin custody service earlier this month. This was an early sign that retail investors were seriously considering moving into the decentralised finance space.
“At some point in time, we’re going to tackle how and under what circumstances banks can hold [crypto assets] on their balance sheet”, McWilliams said.
Disclaimer: The views and opinions expressed by the author should not be considered as financial advice. We do not give advice on financial products.