Alex Castro is the artist behind the illustrations for theacastrobitcoin.
The Federal Reserve, Federal Deposit Insurance Corporation, and Office of the Comptroller of the Currency have issued a joint statement about how banks can use cryptocurrencies over the next year.
The agencies say they are focusing on setting expectations for what banks can do when it comes to holding and using cryptocurrencies, and issuing their own stable coins. The goal is to make sure consumers are protected and that banks act in a responsible manner. The regulators say it is an attempt to make sure the financial industry isn't used to launder ill-gotten currency.
On Tuesday, the acting comptroller released a letter clarifying decisions that the office had made throughout 2020 and early 2021. The letter says that banks will have to ask permission from regional regulators before entering certain fields.
Banks have to show they can handle it.
The Comptroller previously said that banks were allowed to hold cryptocurrencies for customers. The banks were told they could use stable coins. Financial institutions will still be able to carry out these activities, but they will have to prove to regulators that they can do so safely.
The announcements come as some companies are fighting with regulators over what legal classifications their products fall under. After a public feud with the Securities and Exchange Commission over whether what it was selling was counted as securities, Coinbase canceled its program. The Treasury has asked Congress to regulate stable coins, as well as propose that large cryptocurrencies transfers be reported to the IRS.
