US Bankers Remain Cautious on Cryptocurrencies Amid Industry Push for Regulatory Framework
COINBASE Global on Tuesday (Feb 4) renewed its call for US banking regulators to clarify or revise their position on banks offering cryptocurrency services as well as potentially doing tie-ups with companies in the digital assets sector.
Industry Push for Regulatory Framework
The crypto exchange’s move comes amid a broader industry push to lobby lawmakers for a regulatory framework to support the sector’s growth. Most traditional US banks have steered clear of digital asset firms, citing a lack of regulatory clarity.
Regulatory Uncertainty
“For the last several years, US bank regulators have unilaterally and undemocratically barred banks from offering crypto services,” Coinbase chief policy officer Faryar Shirzad said.
Industry Donations
The industry had donated millions of US dollars to back Donald Trump’s return to the White House, as it sought making cryptocurrency regulation a top priority for the new administration after years of enforcement actions that companies have criticised as overreach.
Letter to Regulators
Shirzad also sent a letter to top US banking regulators, including, the Office of the Comptroller of the Currency (OCC), the Federal Reserve and the Federal Deposit Insurance Corporation (FDIC), urging them to permit banks to offer services tied to the crypto sector.
Regulator Response
The OCC declined to comment, and the Fed and FDIC did not immediately respond to Reuters’ requests for comments.
Industry Allegations
While crypto companies have alleged that US bank supervisors have made a concerted effort to choke them off the traditional financial system, regulators have denied the claim.
SEC Task Force
Last month, the US Securities and Exchange Commission’s new leadership created a task force to develop a regulatory framework for crypto assets.
Trump’s Crypto Ambitions
Trump, who has promised to be a “crypto president”, has also named former PayPal executive David Sacks as his “White House AI & Crypto Czar”.
Conclusion
Despite the industry’s push for a regulatory framework, US bankers have remained cautious on cryptocurrencies. The administration’s reshaping of US policy on digital currency is expected, but it remains to be seen how it will impact the sector’s growth.
FAQs
Q: What is the industry’s push for a regulatory framework?
A: The industry is seeking a regulatory framework to support the sector’s growth and provide clarity on the rules governing digital assets.
Q: Why have most traditional US banks steered clear of digital asset firms?
A: Most traditional US banks have steered clear of digital asset firms due to a lack of regulatory clarity.
Q: What is the administration’s expected reshaping of US policy on digital currency?
A: The administration is expected to reshape US policy on digital currency, but it remains to be seen how it will impact the sector’s growth.
Q: Who is Trump’s “White House AI & Crypto Czar”?
A: Trump has named former PayPal executive David Sacks as his “White House AI & Crypto Czar”.