The U.S. Federal Reserve has announced a new program for overseeing banks’ crypto activity, and has further clarified its requirement that the lenders under its authority must get approval before engaging in digital assets activities. The Fed’s move doesn’t change any rules for crypto banking, just defines how the central bank intends to handle its oversight, putting dealings with the crypto sector under the new novel activities supervision program in which the Fed’s specialized experts in digital assets will work alongside the regulator’s regular supervisors.
The Fed also issued a fuller explanation for how the banks it supervises need to get pre-approvals for crypto. An institution that’s issuing, holding, or transacting in dollar tokens to facilitate payments must prove to the supervisors beforehand that it can do it in a safe and sound manner and needs the Fed to formally sign off. This announcement was meant to reinforce the crypto guidance the Fed issued in January, and comes fast on the heels of PayPal’s news that it will roll out its own stablecoin.
The move announced Tuesday doesn’t change any rules for crypto banking, just defines how the central bank intends to handle its oversight, said the Federal Reserve.