The U.S. Federal Reserve is starting a new program for overseeing banks’ crypto activity, and it further clarified its requirement that the lenders under its authority get approval before engaging in digital assets activities.
The move announced Tuesday doesn’t change any rules for crypto banking, just defines how the central bank intends to handle its oversight, putting dealings with the crypto sector under the new “novel activities supervision program” in which the Fed’s specialized experts in digital assets will work alongside the regulator’s regular supervisors.
The Fed also issued a fuller explanation for how the banks it supervises need to get pre-approvals for crypto. An institution that’s “issuing, holding, or transacting in dollar tokens to facilitate payments” needs to prove to the supervisors beforehand that it can do it in a “safe and sound manner” and needs the Fed to formally sign off.
The central bank’s announcements were meant to reinforce the crypto guidance it issued in January, and the Tuesday statements come fast on the heels of PayPal’s news that it will roll out its own stablecoin.
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