US Banking Regulators to Clarify Banks' Crypto Role in 2022

A team of US regulators (Fed, OCC, and FDIC) will clarify in 2022 the way in which the banking institutions can engage with Bitcoin and other cryptocurrencies.

A team of US regulatory agencies including the Board of Governors of the Federal Reserve (Fed), the Office of the Comptroller of the Currency (OCC), and the Federal Deposit Insurance Corporation (FDIC) said in a joint statement on November 23, 2021, that they would clarify next year (2022) the way in which banking institutions can engage with Bitcoin and other cryptocurrencies. 

They also acknowledged the potential opportunities Bitcoin (BTC) and other cryptocurrencies can provide to all the stakeholders, including banks, the financial system, and the customers. In the joint statement, they also made it clear that their main aim is to provide clarity so that "customer protection" as well as "compliance with applicable laws and regulations" can be promoted. 

The statement says:

To that end, the agencies recently conducted a series of interagency ‘policy sprints’ focused on crypto-assets. Similar to a "tech sprint" model, agency staff with various backgrounds and relevant subject matter expertise conducted preliminary analysis on various issues regarding crypto-assets.

All three US regulators (Fed, FDIC, and OCC) have analyzed the Bitcoin activities that the banks might be interested in engaging in. Some of these BTC activities include:

  • Custody
  • Bitcoin collateralized loans
  • Payments
  • Facilitation of customer purchases and sales
  • Holding BTC on the balance sheets of banks

Fed, FDIC, and OCC have planned to share detailed guidance jointly in 2022 with those banks that are interested in offering the cryptocurrency services analyzed. The FDIC chairman, Jelena McWilliams, had hinted at such a development in October 2021. Last month, she said that a team of regulators was working to formulate a set of rules for those banks that want to engage with BTC and other cryptocurrencies. 

Jelena said:

"I think that we need to allow banks into this space while appropriately managing and mitigating risk."

Reports say that the 3 US regulatory agencies started working on crypto regulation back in May 2021.