The House Financial Services Committee has sent a letter to Federal Reserve (Fed) Chair Jerome Powell expressing concerns about two recent Fed supervision and regulation letters regarding digital assets.
The latter two letters, titled “Creation of Novel Activities Supervision Program” (SR 23-7) and “Supervisory Nonobjection Process for State Member Banks Seeking to Engage in Certain Activities Involving Dollar Tokens” (SR 23-8), went out on August 8, 2023.
The Financial Services Committee vs. the Fed
The first of those letters establishes a formal program to enhance oversight of emerging fintech activities in banking. The Novel Activities Supervision Program will include a focus on:
“…crypto-asset custody, crypto-collateralized lending, facilitating crypto-asset trading, and engaging in stablecoin/dollar token issuance or distribution.”
The second of the letters outlined a supervisory approval process requiring state member banks to demonstrate adequate risk management capabilities before issuing, holding, or transacting in dollar-backed stablecoins.
Banks must receive written non-objection from the Fed prior to engaging in these emerging activities, which will undergo heightened monitoring.
The Fed Recently Published Two Controversial Letters
The Committee wrote of its concern that these actions may undermine progress made by Congress to establish a regulatory framework for payment stablecoins. Currently, Congress is grappling with multiple standalone crypto bills that could give much-needed clarity to the industry.
They said if the letters remain in place, it could deter financial institutions from participating in the digital asset ecosystem.
Author: Josh Adams
Tip BTC Newswire with Cryptocurrency
Donate Bitcoin to BTC Newswire
Donate Bitcoin Cash to BTC Newswire
Donate Ethereum to BTC Newswire
Donate Litecoin to BTC Newswire
Donate Monero to BTC Newswire
Donate ZCash to BTC Newswire
