The Fed is clarifying procedures for banks dealing in stablecoins. With the launch of a new programme focusing on crypto assets and blockchain technology, the Fed is extending its influence on cryptocurrency beyond monetary policy. Indeed, on 8 August, the Fed announced plans to "supervise new activities in the banks it supervises".
According to a document detailing the programme, these activities include "technology-driven partnerships with non-banks to provide banking services", providing custody, trading or collateralised lending services for crypto assets, and tokenising securities. The Fed also detailed a "supervisory disapproval process for state member banks seeking to engage in certain activities involving tokens denominated in national currencies and issued using distributed ledger technology". The process involves a bank reporting to the Fed a description of its proposed activity, addressing all types of risks, including operational, cybersecurity, liquidity, and illicit finance risks.
