US regulators ‘policy sprints’ for a unified approach to cryptoassets

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A coalition of American banking regulators published a joint statement yesterday regarding a “Cryptoassets Policy Sprint Initiative”. The consortium consists of the Federal Reserve, the Federal Deposit Insurance Corporation, and the Office of the Comptroller of the Currency. The report underscores the coalition’s intention to provide greater clarity on crypto-related activities carried out by financial institutions.

Policy Sprint Initiative on Crypto Assets

The joint statement summarizes a series of interagency ‘policy sprints’ that have been conducted on digital assets. Similar to technology sprints, staff from partner agencies performed a preliminary analysis on crypto and banking issues. The aim is to create a roadmap for the planned future work.

Basically, regulators want to clarify the role that traditional banks will play in the cryptocurrency industry in 2022. The plan is to clarify the types of crypto-related activities that banks can interact with.

This includes:

  • Hold crypto assets on their balance sheets.
  • Issuance of stable coins.
  • Make crypto trading easier for clients.

Agency officials have struggled to determine the dangers banks face when engaging in crypto business. The team also explored the possibility of revising existing regulations to bring clarity to the public.

The agencies intend to continuously assess the application of bank capital and liquidity criteria for crypto activities by US banks. They will also continue to work with the Basel Banking Committee on Banking Supervision for the consultation process.

Agencies will seek to monitor the evolution of digital assets and address other issues as the market evolves. It will also engage and coordinate with other relevant authorities, as necessary, on challenges arising from cryptoasset operations.

Regulatory uncertainty forcing US businesses overseas

The unsavory stance of US regulators on the crypto industry has led more US companies to head overseas. It was a sentiment shared by Mark Cuban, the outspoken owner of Dallas Mavericks basketball club. He made the statement off the court during a conversation with reporters during Sunday’s NBA game between his team and The Clippers.

The club owner has spoken of honoring legendary retired basketball player Dirk Norwitki by issuing NFTs. Asked about the Staples hub’s recent name change to Crypto.com, he praised the industry.

“These crypto companies that you don’t know and have never heard of before actually have phenomenal businesses. They are global. The only problem is different from the early days of the internet where they are all based in the United States, due to the uncertainty of crypto regulation here some of these companies are based outside of the United States and run. by Americans.

Hong Kong-based crypto giants Crypto.com have reached a deal to rename the iconic Los Angeles arena. The move, like the FTX partnerships, shows growing support for the crypto industry from sports institutions.

The inability of US regulators to provide a clear operational framework for the space has seen more US-owned companies heading overseas. These companies have all migrated to countries like Singapore and others with regulations more favorable to their development.

As a result, instead of leading the charge in adopting the new technology, the United States is starting to catch up. Unlike the Internet boom of the 90s, as Mark Cuban points out.

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A renewed regulatory campaign by politicians

U.S. regulators are now desperately trying to address the lack of regulation in the crypto industry. Although the SEC has said the space should be regulated, it has failed even to add crypto to its regulatory agenda.

However, American politicians are increasingly taking a different approach to crypto. From members of Congress to governors and mayors, American politicians have all shown their support for crypto. Their support led to the creation of bipartisan support caucuses and coalitions. He also sees them regularly calling on the government to create regulations and reap the benefits of the industry while reducing its risks.

The Biden administration also believes federal oversight is needed for stablecoins, a vital bridge to crypto adoption. This placed the onus on Congress to create the required operational framework. Changing attitudes of politicians towards crypto on the part of politicians may also push regulators. This, in the long run, could bring more proactivity and prevent the United States from being left behind.

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Do you see the United States catching up with other countries when regulations are provided for the crypto space? Let us know in the comments below.

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