Federal Deposit Insurance Corporation (FDIC) Acting Chairman Martin J. Gruenberg announced the key priorities for the year ahead. Among other pressing issues that were included in the 2022 agenda, the evaluation of the risks around cryptocurrency has also been given priority.
The notification follows an earlier report by Bloomberg that the President Biden administration is set to release an executive order for crypto. The order is expected in February and it will outline the government-wide strategy for digital assets.
Gruenberg said in the statement,
“The FDIC’s core mission is to maintain stability and public confidence in the U.S. financial system. The FDIC carries out this mission through its responsibilities for deposit insurance, banking supervision, and the orderly resolution of failed banks, including systemically important financial institutions.”
Crypto activities conducted in a safe manner
As per the release, the acting chair has also reiterated that these priorities will require ‘close collaboration among the federal banking agencies.’ And when it comes to risks associated with crypto assets, the release points out the rapid introduction of a variety of crypto-asset or digital asset products. Which in turn can pose significant safety and soundness and financial system risks, the release explained. It further states,
“It is imperative that the federal banking agencies carefully consider the risks posed by these products and determine the extent to which banking organizations can safely engage in crypto-asset-related activities.”
Therefore, it is clear that statement calls for crypto activities that can ‘be conducted in a safe and sound manner.’ However, Gruenberg calls for all agencies to provide ‘guidance to the banking industry on the management of prudential and consumer protection risks raised by crypto-asset activities.’
However, the crypto industry is not completely thrilled about the increased oversight. Marcus Sotiriou, an Analyst at UK-based digital asset broker GlobalBlock had told AMBCrypto that,
“[Senator Ted] Cruz also warned about the possibility of congress “screwing this all up”, as he is worried that they do not understand what Bitcoin is but are trying to regulate it anyway.”
As previously reported, the cryptocurrency industry has been planning to spend 2022 lobbying “Congress and regulators” for legislative clarity on crypto.
Sotiriou further opined,
“I think that U.S. regulation is undoubtedly Bitcoin’s biggest risk, which we will hopefully gain more clarity on soon with a report from the Biden Administration on the regulation of Bitcoin, potentially getting published this month.”
