Crypto Banks on Track to Receive Upgrade by New Federal Reserve Guidelines

Crypto Banks on Track to Receive Upgrade by New Federal Reserve Guidelines

3 months ago

U.S. crypto banks may soon be able to serve crypto and fiat customers.

Crypto Banks on Track to Receive Upgrade by New Federal Reserve Guidelines

Crypto is edging closer to complete interconnectedness with the traditional finance sector after the Fed released new formal guidelines on Tuesday.

Crypto banks could soon be granted "master accounts" at the Fed, which would allow for direct payments with the central bank. That has been the standard for federally-chartered banks, but up to this point banks in the U.S. have had to choose whether they want to conduct crypto transactions or engage in traditional banking services.

Titled  “Final Guidance,” the document left little doubt as to whom these new guidelines are targeting, even though cryptocurrency was mentioned only once.

Fed Vice Chair Lael Brainard commented:

"The new guidelines provide a consistent and transparent process to evaluate requests for Federal Reserve accounts and access to payment services in order to support a safe, inclusive, and innovative payment system."

The initial proposal in 2021 sketched out the same type of multi-tiered system that the Fed wants to implement now. Financial institutions will fall into different tiers, which differ according to how stringent their review process is.

Tier 1 banks would be federally insured, while tier 2 banks would be "subject to prudential supervision by a federal banking agency." Tier 3 banks would be "not federally insured and not subject to prudential supervision by a federal banking agency" and are likely crypto banks like Kraken.

The decision comes after Custodia, a crypto bank, sued the Fed in June based on delaying its master account application.
This article contains links to third-party websites or other content for information purposes only (“Third-Party Sites”). The Third-Party Sites are not under the control of CoinMarketCap, and CoinMarketCap is not responsible for the content of any Third-Party Site, including without limitation any link contained in a Third-Party Site, or any changes or updates to a Third-Party Site. CoinMarketCap is providing these links to you only as a convenience, and the inclusion of any link does not imply endorsement, approval or recommendation by CoinMarketCap of the site or any association with its operators. This article is intended to be used and must be used for informational purposes only. It is important to do your own research and analysis before making any material decisions related to any of the products or services described. This article is not intended as, and shall not be construed as, financial advice. The views and opinions expressed in this article are the author’s [company’s] own and do not necessarily reflect those of CoinMarketCap. CoinMarketCap is not responsible for the success or authenticity of any project, we aim to act as a neutral informational resource for end-users.
0 people liked this article