The banking regulators in the US have announced a plan to clarify the rules and regulations around how banks can use cryptocurrencies over the next year, at a time when governments the world over, including India, are weighing the risks associated with cryptocurrencies and safeguarding investors.
The Board of Governors of the Federal Reserve System, Federal Deposit Insurance Corporation, and Office of the Comptroller of the Currency said in a statement that they recognize that the emerging crypto-asset sector presents potential opportunities and risks for banking organizations, their customers, and the overall financial system.
“As supervised institutions seek to engage in crypto-asset-related activities, it is important that the agencies provide coordinated and timely clarity where appropriate to promote safety and soundness, consumer protection, and compliance with applicable laws and regulations, including anti-money laundering and illicit finance statutes and rules,” the regulators said in a joint statement on Wednesday.
Throughout 2022, the US agencies plan to provide greater clarity on whether certain activities related to crypto-assets conducted by banking organizations are legally permissible and expectations for safety and soundness, consumer protection, and compliance with existing laws and regulations.
The agencies said that they continue to monitor developments in crypto-assets and may address other issues as the market evolves.
Further, the agencies will continue to engage and collaborate with other relevant authorities, as appropriate, on issues arising from activities involving crypto-assets.
In India, the upcoming Cryptocurrency and Regulation of Official Digital Currency Bill 2021 seeks to prohibit all private cryptocurrencies in India.
It, however, allows for certain exceptions to promote the underlying technology of cryptocurrency and its usage.
With the Indian government seeking to ban all private cryptocurrencies in the Crypto Bill 2021, experts and leading industry players have said that provisions relating to “banning” private cryptocurrencies must be looked at carefully.
Several high-profile meetings have recently been held to discuss the regulation of cryptocurrencies. The Parliamentary Standing Committee had also called for the regulation on cryptocurrencies and their ecosystem.
Prime Minister Narendra Modi had earlier said that all democratic countries need to work together on cryptocurrency and ensure that it does not end up in the wrong hands.
Giving an example of the virtual currency, he had said: “Take cryptocurrency or Bitcoin for example. It is important that all nations work together on this and ensure it does not end up in the wrong hands, which can spoil our youth.”