US banks should provide notifications to the country’s central bank before engaging in assets related to cryptocurrencies. This is the information that has been recently been provided by the US Federal Reserve Board in a letter to banking organizations. The guidance comes in the wake of emerging opportunities for banks and their clientele in the crypto sector, which also come with various stability, safety, and protection risks.
In the letter, the country’s central bank has outlined the steps that need to be followed by board-supervised banks before engaging in activities related to crypto assets. For instance, one of the major steps recommended by the central bank involves the assessment of these activities to determine their legal status. Another step involves determining the requirements of regulatory filings.
Additionally, the central bank recommended the banks invest in infrastructure to ensure that systems and protocols are in place for conducting activities in the crypto sphere. Security has been a major concern when it comes to cryptocurrencies and other virtual currencies as there have been numerous reports of anti-social activities related to them.
In recent years, many economies have taken stringent action against cryptocurrencies, including India. The Asian nation was one of the major participants in the global crypto market, but its government has warned investors of the dangers of crypto. The governor of the country’s central bank, the Reserve Bank of India, recently spoke out against cryptocurrencies. He said that anything that gets its value on the basis of make-believe is merely speculation, irrespective of its sophisticated name.