American FED to defines the way of “crypto-banking” relationship
The United States Federal Reserve is now ready to understand the financial relationship between Crypto & Banks.
The Crypto & Blockchain sector is evolving in the US jurisdiction without any proper clear rules and the majority of the crypto companies are operating their business in the country on behalf of traditional financial rules & regulations but still struggling badly.
On 8 Aug 2023, The US Federal Reserve (Fed) announced that it started a new program to trace & study the banks’ activities in the crypto sector and also confirmed that the lenders under its authority get approval before engaging in digital assets activities.
Also the banks will be required to get pre-approvals for engaging with stablecoins and the Fed will give approval on behalf of the potential ability (monitor & fight against risks) of the corresponding bank.
The issued information by the Fed confirmed that here they are not going to bring any new changes in the crypto banking rules. That means crypto companies & banks don’t need to think negatively about such study development.
With all such efforts, the US Fed will try to understand the risks associated with banks & crypto sector relationships and further will try to bring a better approach to maintain the crypto banking relationship.
The majority of the crypto proponents called this move a part of crypto regulatory efforts, as they are going to bring better clarity to handle banking services for crypto companies and also it will bring better clarity for the crypto companies to get banking partners on behalf of rules.
SEC vs Crypto
The Country’s top financial regulator Securities and Exchange Commission (SEC) is trying its best to strictly regulate the crypto sector under the country’s traditional securities laws, even though all such traditional laws do not apply to the crypto sector. Since the beginning of this year, the SEC body has created a very bad environment for crypto companies in the US and in this situation, the majority of the crypto companies are trying to exit the US crypto sector to provide hurdleless crypto services with full confidence.
It is worth it to note that in late 2022 & the beginning of this year, huge numbers of crypto entrepreneurs claimed that they failed to get a new banking partner despite the banks being free to provide services to the crypto companies.
So here we may expect that crypto companies will get a better level of freedom to get banking partners in the future.
Read also: Binance becomes the first fully regulated crypto firm in El Salvador
