The Federal Reserve is starting a new program to oversee the bank’s crypto activities.
The Fed’s move doesn’t change any rules for crypto banking.
In recent days, the Federal Reserve has issued more guidance on cryptocurrencies. Adding to that, the FED released a press release announcing that it requires approval before the state bank can issue, hold, and transact stablecoin payments. These new rules on stablecoins come after PayPal announced its new stablecoin, PYUSD.
In addition, the board will also supervise activities that involve crypto assets and novel activities, including complex, technology-driven partnerships with non-banks to provide banking services to customers. Moreover, the state banks must follow the new rules before engaging in stablecoin activity.
The U.S. Federal Reserve is starting a new program to oversee the bank’s crypto activities, focusing on partnerships. The banks must demonstrate that they have appropriate safeguards to reduce the risks. According to the statement, the goal of the novel activity supervision program is to foster the benefits of financial innovation. And also recognizes the risks and ensures the safety of the banking system.
The Federal Reserve’s move doesn’t change any rules for crypto banking. The new program just defines how the banks intend to handle oversight and make deals with the crypto sector under the new novel activity supervision program.