It’s not an overstatement by any means to say that, as a society, we live in the middle of many different ideas. The diversity in their nature, of course, implies a level of variance in how they impact our lives too, thus not every experience turns out to be a positive one. Instead, on certain occasions, these ideas can produce an experience so bad that it leaves the world reeling from its effect for years to come. In a bid to steer clear of said situations, we tend to closely regulate the influx of all our ideas through specially-designed governing bodies. Now, even though the main task in play here is to make sure no one is carrying out any detrimental activities, the regulators must also consider unique dynamics of different areas. For instance, something mainstream in one area might not be suitable for the health of another sphere, therefore we are constantly engaging with dedicated regulators, as we strive to coexist with the law. Nevertheless, the reality of this productive setup has changed dramatically over the recent past. With technology becoming a dominant force across every major sector, it is currently easier than ever before to straight up bypass the established regulations, but that’s not even the biggest problem. The regulatory industry’s biggest headache right now is spelled by digital currency. Designed as something intended to function outside the government scrutiny, cryptocurrency has unsurprisingly morphed into a hotbed for unethical activities, and the rampage is forcing regulators to step in before it’s too late.
The Federal Reserve, Federal Deposit Insurance Corporation, and Office of the Comptroller of the Currency have jointly revealed an ambitious plan to clarify the rules regarding how banking industry can handle cryptocurrency. While the move is heavily motivated by a need to guard the customers against potential risks that are usually attached to cryptocurrency, it should also cut back on the attempts of using crypto for unscrupulous purposes such as money laundering. If reports from Bloomberg are to be believed, then the clarification will appear in aspects like holding crypto, allowing customers to get crypto, issuing bank’s own stablecoins, and accepting crypto in the form of collateral for loans. Furthermore, it is expected that the banks will be asked to keep a complete record of their cryptocurrency movement within their balance sheet.
“As supervised institutions seek to engage in crypto-asset-related activities, it is important that the agencies provide coordinated and timely clarity where appropriate to promote safety and soundness, consumer protection, and compliance with applicable laws and regulations, including anti-money laundering and illicit finance statutes and rules,” the regulators said in a joint statement.
The decision to shed more light on crypto laws follows up on a standoff between companies and the regulators over legal classification of certain virtual currency by-products.