Saturday, May 25, 2024
10.6 C
London
HomeCrypto NewsFederal Reserve Tightens Supervision on Banks Involved in Crypto and Stablecoin Activities

Federal Reserve Tightens Supervision on Banks Involved in Crypto and Stablecoin Activities

The Federal Reserve has initiated the Novel Activities Supervision Program to enhance the supervision of all banking organizations involved in crypto, distributed ledger technology, and technology-driven partnerships with nonbanks. The move is to ensure that regulation and supervision allow for innovations that improve financial services delivery while protecting bank customers, banking organizations, and financial stability. The Federal Reserve has also provided more information for supervised state banks looking to engage in stablecoin activity to mitigate risks.

Federal Reserve’s Novel Activities Supervision Program

The Federal Reserve has introduced the Novel Activities Supervision Program, aimed at bolstering its supervision of all banking organizations involved in crypto, distributed ledger technology, and technology-driven partnerships with nonbanks to deliver financial services to customers. The program will ensure innovations improve service delivery while protecting the safety and soundness of banking organizations as well as the broader financial system. The program will work within existing supervisory portfolios and notify banks whose activities will be subject to evaluation.

Supervised State Banks and Stablecoin Activity

The Federal Reserve has published more information for supervised state banks that wish to engage in stablecoin activity. The central bank has highlighted risk management practices they need to put in place, including cybersecurity, liquidity, consumer compliance, and illicit finance risks. This move comes after weeks after the House Financial Services Committee advanced a comprehensive regulatory framework for stablecoins, though bipartisan negotiations later hit a snag.

SourceThe Block

DISCLAIMER

As per the principles outlined by the Trust Project, Cryptozia remains dedicated to delivering impartial and transparent reporting. This news article is intended to offer precise and punctual information. Nevertheless, it is recommended that readers autonomously corroborate the facts and seek advice from a qualified expert prior to making any decisions reliant on this content.

latest articles

explore more