FDIC wants to know U.S. banks’ current and potential roles in the crypto market

An increasing number of financial institutions worldwide have either started offering crypto-related services or are exploring the possibility of offering such services to their clientele. With this increased exposure and participation of banks in the cryptocurrency space, the Federal Deposit Insurance Corporation (FDIC) is seeking inputs and information on banks’ current and potential role in the digital assets market.

“The FDIC recognizes that there are novel and unique considerations related to digital assets,” the FDIC wrote in a post on Monday. “Given that banks are increasingly exploring the emerging digital asset ecosystem, the FDIC is issuing this request for information (RFI) to help inform its understanding of the industry’s and consumers’ interests in this area.”

The Federal Deposit Insurance Corporation provides insurance on deposits maintained with U.S. commercial and savings banks. It was created by the 1933 Banking Act to address bank runs during the Great Depression to restore trust in the American banking system, according to Cointelegraph.

The FDIC seeks to improve its understanding of the use cases of cryptocurrencies in financial markets, intermediation, settlements, and payment systems. The corporation also seeks information on the risk and compliance management procedures being used by insured financial institutions and their affiliates in their crypto-related activities.

“At the FDIC, we are laying the foundation for the next chapter of banking by ensuring we have a regulatory framework that allows responsible innovation to flourish,” FDIC Chairman Jelena McWilliams said. “Digital assets is one area in which we have seen rapid expansion and innovation in recent years. This RFI gives us an opportunity to gain additional insight into the market, and what role banks might play in the future.”

The FDIC’s request for information came as U.S. banks started to participate in the crypto market. For instance, JPMorgan added Bitcoin exposure to 12 investment funds while Goldman Sachs opened a crypto trading desk for institutional clients who want to enter crypto derivatives trading.

Interested parties must submit their comments to the FDIC by July 16, 2021

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