Banking regulators expect to provide industry guidance to financial institutions on crypto-related activities once agencies better understand the associated risks, said the acting chairman of the Federal Deposit Insurance Corp.
“We must understand and assess the risks associated with these activities the same way that we would assess the risks related to any other new activity,” said Martin Gruenberg on Thursday during a speech at the Brookings Institution.
Gruenberg also added that a potential future payments system based on the use of stablecoin, which are crypto-assets typically pegged to the U.S. dollar, should complement the Federal Reserve’s forthcoming FedNow service, as well as a possible U.S. central bank digital currency.
Payment stablecoins would also be safer if they were based on permissioned blockchains with robust governance and compliance mechanisms, he said.
“A public unpermissioned blockchain… poses enormous challenges in terms of basic supervisory responsibilities for safety and soundness, consumer protection and anti-money laundering,” Gruenberg said.
In July, the FDIC urged banks that serve cryptocurrency companies to ensure that customers know which of their funds will be insured by the government in case of collapse, noting it was concerned that customers could be confused about the security of their assets.
The FDIC along with the Federal Reserve issued a cease and desist order against crypto lender Voyager Digital, which filed for bankruptcy in July, charging that the company misled custoemrs to believe funds invested on its platform would be guaranteed by the government.