The fall in the price of bitcoin, the FTX case, the liquidity problems of various crypto platforms… All these events make the authorities think one thing: crypto assets are unreliable. For some, even the creation of a strong regulatory framework will not be enough to protect this increasingly popular market. To precisely mitigate the risks, US government organizations have just released a joint statement. Key Message: Cryptocurrency poses significant risk to banking institutions.
News was to come soon about a joint statement signed by US regulators: crypto risks facing banks
Digital assets are fraught with 8 dangers
This is not the first time US authorities and financial regulators have warned banks about crypto risks. However, warnings tend to intensify after recent events related to this market. The latest is a joint statement signed by the Federal Reserve, FIDC and OCC. It was made public on January 3, 2023.
In this statement, the three agencies highlight eight potential crypto risks facing banking organizations. Thus it is:
- fraud risks;
- legal uncertainties associated with cryptocurrencies;
- erroneous and/or false statements about federal deposit insurance;
- crypto market volatility;
- volatility of stablecoins;
- risks of infection due to the interconnection of crypto players;
- lack of a regulatory framework;
- vulnerability to cyber attacks.
Protection of the banking system at any cost from cryptocurrency
The Federal Reserve, FIDC and OCC are in no way thinking of banning the use of cryptocurrencies in financial institutions. There is also no federal law criminalizing digital assets, whatever they may be. However, the three agencies that signed the statement intend to keep a close eye on any banking organization wishing to engage in crypto-currency activities.
In their opinion, the issuance or ownership of crypto-assets (issued, held or transferred on an open, public and/or decentralized network or similar public and/or decentralized system) is inconsistent with safe and sound banking practices. They note at the bottom of the page that “crypto asset” refers to any digital asset created using crypto technologies.
Of course, the digital dollar project is currently underway. In addition, regulators are doing their best to define cryptocurrency rules tailored to current markets. However, if we look at this last statement, the adoption of cryptocurrency by banks will not happen soon.
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My name is Ariel, I am 31 years old. I have been working in the field of web writing for 7 years. I discovered trading and cryptocurrency just a few years ago. But this is the universe that interests me a lot. And the topics covered within the platform allow me to learn more. A singer in my spare time, I also cultivate a great passion for music and reading (and animals!)