According to Reuters, Federal Deposit Insurance Corporation (FDIC) Chair Jelena McWilliams states that authorities in that nation are examining a “clear way” for banks and customers to hold Bitcoin and other cryptocurrencies.
By doing so, the US government hopes to entice these businesses to store their Bitcoin inside the country’s regulated corporations, therefore retaining some sort of control over the crypto realm. McWilliams confirmed to Reuters that the judgment is being evaluated by a panel of US bank regulators.
In this approach, these authorities want to lay up a path for banks to enter the Bitcoin and cryptocurrency markets. The roadmap includes prospective laws governing how a bank may store a crypto-asset, its custody, customers trading crypto-based products, and the use of BTC and other cryptocurrencies as collateral for loans, among other things.
If approved, the plan may usher in a new wave of Bitcoin and cryptocurrency acceptance, allowing millions of individuals to get access to the crypto sector, crypto services, and financial products based on this new asset class via a conventional gateway. The Chairman of the FDIC said the following:
I believe that banks should be permitted to operate in this market, as long as risk is effectively managed and mitigated. (…) If we do not introduce this activity within banks, it will grow on the outside. (…) Federal officials will be incapable of regulating it.
Keeping Bitcoin And Other Cryptocurrencies In the United States, Soil McWilliams stated a similar position as SEC Commissioner Hester Peirce and other crypto-friendly government figures. In other words, she believes in establishing incentives to keep Bitcoin and the cryptocurrency business domestic.
Additionally, the FDIC Chair wants to shield customers from gaining crypto exposure via unregulated and possibly inefficient products. The ultimate goal is for the United States’ three primary bank regulators, the Federal Deposit Insurance Corporation (FDIC), the Office of the Comptroller of the Currency (OCC), and the Federal Reserve, to adopt a uniform strategy to cryptocurrencies. According to McWilliams:
My objective in this interagency group is to essentially pave the way for banks to serve as custodians of these assets and to utilize crypto and digital assets as collateral. At some point, we’re going to discuss how banks can hold them on their balance sheets and under what conditions.
According to the study, authorities seem to be at odds about how to let Bitcoin and other cryptocurrencies to be used as collateral owing to their erratic price movements. In such vein, McWilliams continued:
The problem is… the valuation of these assets and the daily fluctuations in their worth. You must determine how to consider such balance sheet positions in terms of capital and liquidity.
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