US banks have tightened requirements for working with stablecoins
Date: 2023-08-10 Author: Karina Ziganova Categories: BLOCKCHAIN, IN WORLD
State-owned banks that are members of the US Federal Reserve System (FRS) will need to obtain written approval from the supervisory authority to operate with stablecoins. Reuters writes about it.
Banks will now have to obtain permission before issuing, holding, or transacting dollar tokens used to facilitate payments, such as stablecoins.
As explained by the Fed, the new program for supervision of the blockchain and crypto activities of banks will strengthen control over operations with cryptocurrency.
Banks involved in dollar token-related activities will continue to be subject to supervisory review as well as enhanced monitoring of those activities, the Fed said.
How banks use stablecoins
In early 2021, the Office of the Comptroller of the Currency (OCC) allowed U.S. financial institutions to use the infrastructure of blockchain networks to make payments in stablecoins.
Thus, the regulator allowed American banks to take part in independent verification of blockchain network nodes. In addition, they were allowed to use stablecoins for payment and other banking transactions.
The OCC expected that such a decision would increase the influx of financial institutions into the blockchain industry and increase the efficiency, effectiveness and stability of payment activities. Moreover, according to the regulator, the blockchain will also reduce the risk of falsifying or adding inaccurate information to the database, since information is added only after consensus has been reached between the verifying nodes.
U.S. Undecided on Stablecoin Bill
However, since then, stablecoins in the US have not received proper regulation. In particular, in April, the stablecoin bill was criticized in the House Financial Services Committee. It has been called obsolete.
The draft bill on stablecoins proposes to ban cryptocurrency-backed stablecoins and introduce a digital national currency (CBDC). However, according to the Democrats, a number of events have occurred in the crypto industry since the drafting of the document, including the collapse of the FTX cryptocurrency exchange. Moreover, some members of the Committee even believe that it is necessary to figure out “whether stablecoins are needed at all.”
