U.S Fed establishes regulations for Banks regarding crypto assets

The U.S Federal Reserves officially issued guidelines for banks that are expanding business in the crypto industry.

All banks will be required to inform the Fed about them adding cryptocurrencies before they officially launch them on the platform.

The authorities instructed banks to follow the legally permitted guidelines that protect consumers to avoid being sued or charged with penalties in the future.

The Fed asked banks to inform local authorities before they make any crypto initiatives. The agencies responsible for the banks will be required to supervise every step taken to ensure they are following the laws.

The banks will be required to have risk management systems to protect their consumers from a big loss.

The increasing popularity and adoption of crypto have motivated many banks to expand in digital assets. However, the lack of regulation and repetitive fraud cases had the U.S authorities worried about consumer protection.

Elizabeth Warren also highlighted this issue to the U.S. Office of the Comptroller of the Currency (OCC) to replace its prior established crypto guidance with  “a comprehensive approach in coordination with other prudential regulators,” 

Now the U.S Fed is finally taking an initiative to evaluate its previous guidance and make it more crypto-friendly for consumers and providers.

For the past few months, U.S regulators have been making an effort to regulate cryptocurrencies to ensure they don’t affect the traditional economy and protect investors from fraud.