New York is taking the first step into regulating cryptocurrency. New York’s Department of Financial Services (DFS) shared important guidelines for banks that wish to explore possibilities with virtual currency.
According to the statement, these guidelines are meant for both New York-based banks and foreign financial institutions that have been licensed to operate in the state. The banks will be required to get approval from DFS to officially list digital currency on its platform.
“Today’s Guidance is critical to ensuring that consumers’ hard-earned money is protected,” said Superintendent Adrienne A. Harris.
This guidance includes everything related to cryptocurrencies such as digital wallets or stablecoins. Since traditional banks are highly involved with the economy, if these institutions want to adopt new technology, there’s a higher risk in case of failure.
The FTX crash has alarmed regulators to draft guidelines for Web3 firms and traditional companies that are actively involved with blockchain technology and utilize digital currency for transactions.
The US seems to be speeding up the regulatory aspect of crypto and NFTs. Recently, Elizabeth Warren presented a bill for crypto regulations and will also investigate the money laundering taking place within the country using virtual currencies.
This new guidance report for banks is only limited to the state of New York, but this can motivate other states’ regulators to implement similar policies for its financial branches.