Yesterday a joint risk warning about crypto-assets was issued by the three main U.S. banking regulators, the Federal Reserve, the Federal Deposit Insurance Corporation (FDIC) and the Office of the Comptroller of the Currency (OCC). Amongst a raft of risks, the regulators warned banks against owning public blockchain crypto-assets, including stablecoins.
While the regulators have previously warned of risks, there’s an issue that may have impacted the timing. Before Christmas, the global Basel Committee for Banking Supervision published the final crypto-asset Basel rules. While the rules are not particularly permissive, they are far more accommodating than previous proposals. It’s conceivable that the U.S. banking regulators wanted to emphasize that this doesn’t mean it’s open sesame for banks to get involved in crypto.
Another timing issue is the November collapse of the FTX crypto exchange, which led to two banks needing to appease investors. Silvergate’s stock price is down two-thirds, with the larger Signature Bank less exposed to the crypto sector.
Article continues …
Want the full story? Pro subscribers get complete articles, exclusive industry analysis, and early access to legislative updates that keep you ahead of the competition. Join the professionals who are choosing deeper insights over surface level news.
