Already this year, U.S. federal banking regulators have begun scrapping certain curbs on banks’ crypto activities. Now a collection of industry trade groups wants more — they’re calling for further action to facilitate their involvement in the fledgling industry.
In a joint letter to the President’s Working Group on Digital Asset Markets, the trade groups — including the U.S. Securities Industry and Financial Markets Association, the American Bankers Association, the Bank Policy Institute and others — acknowledged that, in the past couple of weeks, the U.S. federal authorities have already retracted certain policies and guidance that hindered the industry’s ability to participate in the crypto sector.
These actions by regulators — including the Federal Reserve Board, the Federal Deposit Insurance Corp. and the Office of the Comptroller of the Currency — came in response to previous recommendations from the industry. Now, the trade groups are calling for further efforts to facilitate the banks’ activities.
“The guidance that we highlighted in our prior letter stifled banks’ ability to engage in digital asset activities. … The agencies helpfully rescinded or withdrew multiple problematic interpretive letters, statements and other guidance documents over the past few weeks,” they said in the letter.
“But additional steps are needed for the U.S. to achieve a leadership position in digital assets and financial technology — namely, greater clarity regarding banking organizations’ ability to engage in digital asset activities,” it added.
In particular, they are calling on the regulators to coordinate their rules and guidance in this area as much as possible. “Doing so will encourage innovation across the entire banking sector, irrespective of which agency is a bank’s primary federal regulator,” it said.
They also asked the agencies to confirm that anything that’s allowed with traditional assets is also permitted for digital assets.
“A tokenized asset is no different from the traditional form of that asset; therefore, the regulatory framework should be technology-neutral,” they said.
Finally, they called on regulators to set standard risk-management expectations for areas such as anti-money laundering, capital and liquidity risks — allowing firms to adhere to basic standards rather than seeking permission for specific crypto activities on a case-by-case basis.
These additional actions to clarify the ability of banks to engage in crypto activities are needed “for the U.S. to achieve a leadership position in digital assets and financial technology,” they said.
“Banks are an essential component of the financial and payments systems and are governed by a comprehensive regulatory framework designed to mitigate the risks inherent to financial activities. It is therefore critical that the federal banking agencies take further steps to facilitate banks’ engagement in digital asset activities,” the letter said.