The FDIC believes that banks must work with cryptocurrencies or the activity will continue to grow without them. Regulators believe that offering cryptocurrency banking services is a rude operation due to its volatility.
A group of banking regulators in the United States of America is trying to create a clear path for banks and customers who want to hold bitcoin and other cryptocurrencies. Jelena McWilliams, the current president of the Federal Deposit Insurance Corporation (FDIC), talked about the subject at the Milken Institute Global Conference.
As the Reuters agency found today, the insurance expert expressed at the conference that cryptocurrencies could get included in each person’s bank balances as traditional assets. She even affirms that these assets could begin to get used as collateral for loans.
There are many non-bank companies and decentralized finance platforms offering loans with cryptocurrencies. One of these companies is the Spanish company BitBase.
The offering of loans is a service under constant evolution that, according to the official, banking institutions are missing out on by not offering it.
The Banks Need to Define their Rules
The official warned that the banking industry must define clear rules on the custody of cryptocurrencies. In this way, users could facilitate the trading of these assets. McWilliams also stated that banks should enter this space as long as they adequately manage and mitigate risk.
McWilliams notes that the biggest challenge is choosing what type of capital and liquidity treatment to assign to these high-volatility assets. Once these parameters get defined, the banking industry will be able to protect the cryptocurrencies of its clients. These defined parameters, in turn, would allow federal agents to regulate the activity.
According to McWilliams, Banks are Missing out on Crypto Trading
During the conference, which took place in the city of Beverly Hills in California, McWilliams said that he not only desires to establish a clear picture for banks to use cryptocurrencies. She also warned that investments in these assets would continue to grow outside of the banking industry if they do not manage to adapt to the situation.
Precisely the spokeswoman for the FDIC, who is a member of the Republican Party, adds that without their contribution as intermediaries, federal regulators will not be able to control it, something that he believes should happen.
In May, these statements show the result of the union of United States government agencies to regulate cryptocurrencies.
The initiative got proposed by Michael Hsu, recently appointed as director of the OCC. In a virtual conference of the Committee on Financial Services of the House of Representatives of the United States of America, Hsu explained his thoughts on the fragmented regulations that have received approval so far for crypto assets.
Since then, the FDIC has worked closely with the Federal Reserve and the country’s Office of Currency Control to achieve this goal.
By: Jenson Nuñez
