In pursuit of Cryptocurrency adoption, Reuters reported that the Federal Deposit Insurance Corporation (FDIC) Chair, Jelena McWilliams affirmed that U.S. regulators are looking into possible ways to provide a clear roadmap for banks and clients that are looking to deal in bitcoin and other crypto assets.
This will avail the U.S. regulatory the legal avenue to ensure that crypto holders will hold their assets in line with the country’s regulations – at the same time maintain a certain level of control in the crypto space.
The roadmap is expected to provide clear rules for banks on crypto assets holdings, client’s trading, using crypto as collateral for loans and other crypto-related activities.
The FDIC Chair said, “I think that we need to allow banks in this space, while appropriately managing and mitigating risk.
“If we don’t bring this activity inside the banks, it is going to develop outside of the banks. … The federal regulators won’t be able to regulate it.”
This development will certainly usher in a new wave of adoption in the crypto space and also give millions of people access to the industry through the traditional gateway.
However, in absence of regulatory clarity, some banks such as US Bank launched their cryptocurrency custody services earlier this month following strong demands from institutional clients.
According to McWilliams, the end means in providing regulatory clarity is to protect the bank and its clients from unregulated and inefficient crypto assets in their bid to gain exposure in the crypto industry.
The Chair announcement gives a concise and clear picture of the company’s goal. The goal of the team was to ensure cryptocurrency policy coordination among the three main U.S. bank regulators – FDIC, Federal Reserve and Office of the Comptroller.
She said: “My goal in this interagency group is to basically provide a path for banks to be able to act as a custodian of these assets, use crypto assets, digital assets as some form of collateral.
“At some point in time, we’re going to tackle how and under what circumstances banks can hold them on their balance sheet. The issue there is … valuation of these assets and the fluctuation in their value that can be almost on a daily basis.”
“You have to decide what kind of capital and liquidity treatment to allocate to such balance sheet holdings,” McWilliams added.
At the time of writing data from Coinmarketcap sees Bitcoin trading at $59,021.33 down by 6.29 percent in the last 24 hours.
