The fall in the price of Bitcoin, the FTX affair, the liquidity problem of various crypto platforms… These are all events that make the authorities think one thing: crypto assets are not reliable. For some, even creating a strict regulatory framework would not be enough to secure this increasingly popular market. To precisely mitigate the risks, US government organizations have just released a joint statement. Key message: crypto poses a significant risk to banking institutions.
Digital assets have 8 risks
This is not the first time that US authorities and financial regulators have banks on guard against crypto risks. However, warnings tend to intensify after recent events related to this market. The latest is a joint statement signed by the Federal Reserve, the FIDC and the OCC. It was made public on January 3, 2023.
IN this statement, the three agencies highlight eight potential crypto risks facing banking organizations. In summary, these are:
- fraud risks;
- legal uncertainties related to cryptocurrencies;
- false and/or false statements regarding federal deposit insurance;
- market volatility crypto;
- the volatility of stable currencies;
- risks of contagion due to the interconnectedness of crypto players;
- lack of a regulatory framework;
- vulnerability to cyber attacks.
There is no way the Federal Reserve, FIDC, and OCC are considering banning the use of crypto within financial institutions. There is also no federal law criminalizing digital assets whatsoever. However, the three agencies that signed the statement intend to closely monitor any banking organization that is willing to engage in crypto activities.
According to them, the issue or holding of cryptoassets (issued, stored or transferred on an open, public and/or decentralized network, or a similar public and/or decentralized system) is incompatible with safe and sound banking practices. They note at the bottom of the page that “cryptoasset” refers to any digital asset created using crypto technology.
Of course, the digital dollar project is currently under development. Also, regulators are doing everything they can to define crypto regulations tailored to current markets. If we look at this latest statement, however, the adoption of crypto by banks will not be anytime soon.
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My name is Ariela and I am 31 years old. I have been working in the field of online writing for 7 years. I only discovered trading and cryptocurrency a few years ago. But it’s a universe I’m very interested in. And the topics covered within the platform allow me to learn more. Singer in my spare time, I also cultivate a great passion for music and reading (and animals!)