Cryptocurrency News Today – Headlines for September 22

  • Federally chartered banks can now hold reserve funds for issuers of stablecoins
  • This move offers better regulatory certainty for federally chartered banks to give safer client services
  • Banks can hold reserved funds as long as the issuer has enough assets to back the stablecoin

Cryptocurrency news today – according to recent reports in the digital asset space, federal savings associations and national banks now can hold reserve funds for issuers of stablecoin. The regulation was issued by the Comptroller of the Currency U.S office. The new guidelines were put down in a six-page interpretive letter:

Stablecoin issuers may wish to put digital assets in reserve accounts with a national bank to give assurance that the stablecoin issuer has enough assets to back the stablecoin where there’s a hosted wallet. We have concluded that a national bank might hold stablecoin reserves as a service to its clients. Banks should adequately consider all the relevant risk factors before entering any relationship or agreement with a stablecoin issuer. Factors like compliance risk and liquidity risk must be considered going forward.”

Better Regulatory Certainty for Federally Chartered Banks

Banks that engage in the above-mentioned business must follow anti-money laundering and KYC (know-your-customer) regulations. They must work under the federal securities laws. In a statement, Brian Brooks the Acting Comptroller of the Currency said:

Banks are currently engaged in stablecoin related activities that involve billions of USD daily. This opinion offers better regulatory clarity for banks in the federal banking framework to offer their clients safer services soundly.”

A staff statement was also published along with the OCC letter from the SEC’s FinHub unit. The staff statement focuses mainly on issues related to virtual assets. While stressing that the staff statement isn’t a form of guidance or a statement from the broader Commission, the note that was released indicated that whether a digital asset, (including stablecoins) is a security (or not) under the federal securities laws inherently depends on a facts and circumstances determination.

The New Regulation Providers Better Scrutiny

The staff statement added:

This determination will need careful consideration of the state of the instrument that encompasses the rights it purports to stand for, as well as the way it is offered and sold. Market participants can structure and sell digital assets in a way that it doesn’t constitute security. However, the terminology used to categorize a digital asset or an individual providing financial services involving digital assets, may not necessarily be in line with the way the said asset or service is defined under the SEC’s rules. The Staff is ready to engage market participants and help them by providing a no-action position regarding whether the services relating to digital assets may require the application of federal securities laws.”

Princess Ogono is a writer, lawyer and fitness enthusiast. She believes cryptocurrencies are the future. When she's not writing, she spends time with her adorable cat, Ginger and works out often.

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