FDIC: examine risks of crypto will be priority this year
The Federal Deposit Insurance Corporation stated that it will investigate more on crypto risk this year as a top priority.
Increasing crypto adoption is also giving new challenges for government agencies. Almost every government is trying to bring better laws and rules to prohibit the misuse of this crypto industry in illegal activities. However, some laws are working perfectly but some black hat hackers and illegal players in the Crypto space are tricking the rules easily.
On 7 February, The Federal Deposit Insurance Corporation (FDIC) published its consideration for this year to figure out the main risks associated with the crypto industry adoption. Agency also clearly said that it will do a high-level evaluation to figure out the risk as a top priority matter in its list.
Besides the consideration of risks posed by crypto, FDIC will also consider bolstering the Community Reinvestment Act, addressing financial risks posed by climate change, reviewing the bank merger process, and finalizing the Basel III Capital Rule.
Through the release notice, FDIC stated that rapid adoption of the crypto in the traditional banking and finance system may result in a very big risk to the existing banking system. So it will be better to take decisions before any negative result.
“To the extent, such activities can be conducted safely and soundly, the agencies will need to provide robust guidance to the banking industry on the management of prudential and consumer protection risks raised by crypto-asset activities.”
However, FDIC will examine the possible risks because of crypto but besides all these things FDIC officials are working to bring a framework to allow the banks to provide crypto-related services. For the same initiative, FDIC did some work with US banking regulators like the Federal Reserve, and the Office of the Comptroller of the Currency to create the regulatory framework to allow the banks to embrace the Bitcoin trade-like services. However this initiative of FDIC was started last year but later no news came about what the government agencies are doing, whether they will allow it or not or how much time it will take to create such laws for the banks.
According to experts, allowing the banks to provide crypto services is a big need because if banks will not be allowed to give crypto-related services then the majority of the people will move toward crypto platforms and banks will have no customers.
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