The US Federal Reserve (Fed) has recently announced the launch of a new monitoring program aimed at overseeing activities related to cryptocurrency by banks. This program, named the “New Activities Monitoring Program,” was unveiled on August 8th to enhance the tracking and supervision of financial activities carried out by banking institutions, particularly those involving cryptocurrencies, blockchain technology, and non-bank financial operations.
According to information from the Fed, the new program will not alter the existing regulations applicable to cryptocurrency banks, but it will focus on how they conduct their monitoring activities. This includes collaboration between Fed’s digital asset experts and regular supervisory personnel from the regulatory agency to effectively carry out this oversight.
The program also provides a specific explanation regarding the need for banks to obtain Fed’s approval before engaging with stablecoins. If an organization is involved in activities such as “issuing, holding, or transacting in USD-backed assets for payment purposes,” they must demonstrate their capability to do so “safely and soundly” and obtain official approval from the Fed.
These regulations will reinforce the cryptocurrency laws introduced by the Fed in early 2023. This move comes after the US House of Representatives passed a bill for the regulation of digital currency and stablecoins, and notably after PayPal – a major player in the payment industry – introduced their own stablecoin.
This announcement underscores the significance of ensuring safety and effective management for cryptocurrency operations, while also reflecting the swift response of the industry to changes and new opportunities.