Banks Should Back Deposits From Crypto Customers With Cash: US Agencies
According to the statement, it is recommended that banks do not use deposits from cryptocurrency customers for lending purposes and instead keep enough cash reserves to fully support all deposited funds. Once again this week, financial regulators in the US collaborated to emphasize to banks the significance of addressing the potential risks of cryptocurrencies. However, as of now, no fresh obligations have been mandated. The Federal Reserve, FDIC, and OCC emphasized the importance of conducting thorough risk assessments for firms, but clarified that their recent statement does not introduce any novel policies. Instead, the statement serves as a reminder to banking organizations to adhere to established risk management principles in their dealings with cryptocurrencies. Banks need to take into account the risks associated with deposit concentration, interconnection, and potential liquidity issues. Additionally, it is recommended that businesses carry out thorough due diligence and...
