Fed Gives More Directions on Crypto to Financial Institutions

Greater regulations for crypto by the U.S. could be necessary for mainstream investors’ adoption of digital blockchain assets.

Crypto Regulations Light Way for Mainstream Adoption

While most people watching the U.S. Federal Reserve Board tend to keep an eye on actions related to fiat monetary policy, the Fed also provides directives to banking institutions related to the conduct of crypto activities.

The Fed’s Aug. 16 directive is the latest in a trend of progressively increasing efforts by U.S. financial watchdogs to give safeguards to cryptocurrency investors.

According to an excerpt from the Fed’s press release:

“The supervisory letter issued today outlines the steps Board-supervised banks should take before engaging in crypto-asset-related activities, such as assessing whether such activities are legally permissible and determining whether any regulatory filings are required. Additionally, the supervisory letter states that Board-supervised banking organizations should notify the Board before engaging in crypto-asset-related activities.”

At the beginning of August, BSC News reported on comments by U.S. Securities and Exchange Commission Director Gary Gensler, who asked Congress for more power to regulate crypto.

“Make no mistake: It doesn’t matter whether it’s a stock token, a stable value token backed by securities, or any other virtual product that provides synthetic exposure to underlying securities. These products are subject to the securities laws and must work within our securities regime,” Gensler said

In January, Fed Chair Powell reiterated his support for private stablecoins, provided they have proper regulation.

It may seem counterintuitive to some die-hard “degens,” but in the long run, the U.S. authorities’ focus on protective regulations could be seen as a bullish sign for crypto — and its adoption by mainstream investors.

Source : bsc.news