Will crypto banks soon have an account with the Fed?
On Monday, the Federal Reserve announced that it has guidelines ready for opening so-called "master accounts" at the Federal Reserve.
On Monday, the U.S. central bank, the Federal Reserve (Fed), announced that it has guidelines ready for opening so-called "master accounts" at the central bank. Crypto banks would also be eligible.
In a 49-page report from the Federal Reserve Board, guidelines are provided for evaluating various institutions that want to open an account at the Fed. This would give them access to the global payments system.
More specifically, the document provides a framework for banking services that have a license to do business in the U.S. but are not authorized to hold a reserve account at the Fed. This includes banks that offer crypto services as part of their activities.
US Fed: These are the new guidelines
According to the new guidelines, requests from involved banking service providers will now be reviewed in three stages. Depending on the risk factor, they must be subjected to stricter checks in the process. If these checks are passed successfully, a corresponding main account at the Federal Reserve can be opened. The U.S. Federal Reserve stated on its website the following:
"Institutions engaged in new activities for which authorities are still developing a suitable policy and supervisory options would be subject to a tougher review."
In developing the regulatory framework, the Federal Reserve also accepted proposals from institutions in the banking sector involved. It included "institutions with new kinds of licenses, such as crypto custodial banks," according to the central bank documents.
The document and the board of governors’ statements suggest that crypto banks have a place in international payments, in their view. With corresponding stringent checks and risk assessments, they could join the central banks’ international operations.
In June, the Bank for International Settlements (BIS) agreed on a framework for holding crypto assets in central bank reserves. This proposed allowing crypto like Bitcoin to represent up to 1 percent of the respective central bank’s total Tier 1 capital.
Despite ongoing skepticism from central banks toward cryptocurrencies, the topic seems to be fading into the background gradually.
