The Fed wants to monitor the use of cryptocurrencies in the banking sector with its “New Activities Supervision Program”.
The issue of controlling and regulating stablecoins is getting more and more important in the USA. However, the Fed wants to control this use through its new initiative.
With its new initiative, the Fed wants to oversee stablecoins used in the banking industry
The Federal Reserve plans to control crypto and stablecoin activities in the banking industry through an initiative called the New Activities Supervision Program. This program will increase oversight of all Federal Reserve-supervised banking entities and will specifically focus on areas such as crypto, distributed ledger technology, and technology-focused partnerships.
The central bank noted that innovation could cause rapid changes and new risks could arise that could affect the safety and soundness of banking institutions. Therefore, he stated that new activities may not be adequately addressed by current supervisory approaches and may raise concerns for the stability of the financial system.
With this new supervisory program, the Federal Reserve aims to protect customer safety, banking institutions and financial stability while allowing banks to continue innovation and improve the access and delivery of financial services.
While noting that banking institutions are not prohibited or discouraged from providing banking services to a particular class or type of customers, the program will focus on auditing new activities brought about by innovation and closely monitor the effects of these activities on the financial system.
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