Regulators have warned banks of the risks of the cryptocurrency industry.
U.S. banking regulators argued that the troubles experienced in the cryptocurrency industry last year underscore the importance of keeping banks out of the crypto industry.
Regulators Warn Banks
The US Federal Reserve and other regulators have issued a cryptocurrency warning for the banking system. However, the statement does not develop a new policy on how traditional loan companies will deal with digital assets.
The statement included the following:
“Given the significant risks highlighted by the recent failures of several major crypto companies, regulators continue to take a cautious approach regarding crypto-asset-related activities and risks in the banking organization.”
Regulators argued that issuing digital assets and keeping them on the balance sheet is “probably inconsistent with safe and sound banking practices.” Three regulators, including the Office of the Currency Controller (OCC) and the Federal Deposit Insurance Corporation (FDIC), stressed that there are “significant safety and soundness concerns with business models that are concentrated in crypto-asset-related activities.”