US Federal Reserve unveils Novel Activities Supervision program to oversee banks’ crypto-related activities, emphasizing stablecoin safeguards.
The initiative‘s main goal will be to supervise the banks’ activities related to cryptocurrencies, such as custody, lending, trading, and the issuance or distribution of digital assets.
The institution will guide the banks before engaging in activities related to cryptocurrency.
The Fed said that the goal of the law is to foster the benefits of financial innovation while recognizing the risks of working with cryptocurrency.
The program will be subject to the existing supervisory processes of the US Federal Reserve. The new initiative launched by the Fed does not add to or modify the current rules for banks dealing with cryptocurrency in the US.
Stablecoins supervision
The institution also issued information on how state banks must act before engaging in activities related to stablecoins.
They must demonstrate to the Fed supervisors that they have appropriate safeguards for stablecoins.
Crypto regulations in the US
The current regulatory landscape in the US for the crypto industry has been challenging, and different crypto players have been thinking about moving their operations to more crypto-friendly regions.
Over the last few months, different institutions like the US Commodities and Futures Trading Commission (CFTC) and the US Securities and Exchange Commission (SEC) have been chasing down some of the major crypto players in the crypto industry, like Coinbase and Binance, among others.
