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In a joint statement issued Thursday, the Federal Reserve,
Federal Deposit Insurance Corporation, and the Office of the
Comptroller of the Currency said banks should have robust tools
in place to monitor funds placed by crypto-asset related
entities. The agencies noted deposits placed with banks for the
benefit of crypto consumers, as well as stablecoin reserves,
could be subject to rapid outflows.
Regulators said the new statement was spurred by "recent events"
in the crypto sector that highlighted volatility risks. While
they noted the statement does not include new requirements and
banks are not prohibited from providing services to particular
sectors, it does mark the latest in a series of moves from bank
regulators urging caution in any crypto dealings.
The guidance represents the first time the bank regulators have
highlighted deposits linked to stablecoins — a type of
cryptocurrency typically pegged to the U.S. dollar — as
susceptible to volatility during periods of stress in the crypto
market. Most of the major stablecoins including Tether and USD
Coin are asset-backed, meaning that the stablecoin issuer holds
assets, including bank deposits, that can quickly be redeemed to
meet withdrawal requests.
But regulators expressing concerns about the stability of those
reserves could cause banks to further examine their relationship
with stablecoin firms. The statement noted that stablecoin
reserves could see large and rapid outflows in cases of
unanticipated stablecoin redemptions and turmoil in crypto
markets, for example.
(Reporting by Pete Schroeder and Hannah Lang; Editing by Chizu
Nomiyama)
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