As informed by Reuters, US banking regulators intend to provide more clarity on how far banks can go with regard to cryptocurrencies. Among the guidelines are keeping cryptos on your balance sheet, issuing stablecoins and facilitating the negotiation of cryptocurrencies on behalf of your customers.
In this group of regulators are the three most important agencies in the US: The Federal Reserve (Fed), the Federal Deposit Insurance Corporation (FDIC) and the Office of the Comptroller of the Currency (OCC).
This cryptocurrency race has already started in other countries, such as El Salvador, which adopted Bitcoin as its legal currency. As well as in Estonia where the biggest bank will allow their customers to trade cryptocurrencies directly through their app.
This greater regulatory clarity contains both positive and negative points. On the one hand, we may see greater adoption of Bitcoin, as it will be easier to access cryptocurrency as banks will be freer for this type of operation.
On the other hand, citizens will have less privacy as it will be easier for the government to monitor such negotiations.
“The agencies have identified a number of areas where greater clarity is needed”
While Bitcoin and other cryptocurrencies are not banned in the US, there is also not much clarity about how far banks and other companies can comfortably undertake, ie within the law. Because of this, there is a lot of pressure both from the traditional sector and from the cryptocurrency sector, such as exchanges and miners.
“Through 2022, agencies plan to provide greater clarity on which crypto-asset-related activities conducted by banking organizations are legally permitted and safety and health expectations [financeira], consumer protection and compliance with existing laws and regulations.”, pointed out the regulators.
It’s already happening in other countries
The need for clear legislation is quite urgent, after all other banks and countries have already started this cryptocurrency race. As an example, we have the largest bank in Estonia, the LHV, which announced this Thursday (18) that its customers will be able to trade cryptocurrencies.
This negotiation will take place directly within the bank’s own application. There, customers can buy up to 8 different cryptocurrencies, including Bitcoin (BTC), Ethereum (ETH) and Litecoin (LTC). The trading will be intermediated by the Bitstamp exchange and the funds held by BitGo.
While not the ideal way to use bitcoin, this is a big step towards adopting cryptocurrency as both a currency and a store of value. And obviously the US doesn’t want to be left out, as it generates both income and jobs for the country.