The US Federal Deposit Insurance Corporation (FDIC) has notified banks of the new rules. Now financial institutions must warn about all transactions with cryptocurrencies.
The regulator said in a statement that due to potential systemic risks, any company or bank that has the ability to engage in cryptocurrencies must disclose their plans, and any institution conducting crypto operations must notify the FDIC “immediately”.
“Crypto-related activities can pose significant security risks, as well as financial stability and consumer protection issues.”
Reuters explainsthat regulators are considering the growing popularity of cryptocurrencies and its impact on security. Joe Biden has already instructed government agencies to assess the risks and rewards associated with cryptocurrencies. Such a move is seen as a clear recognition of the potential implications of the growing importance of digital assets.
According to the regulator, a disruption in transactions or activities of crypto assets could confuse customers, causing “raids” on firms’ financial assets.
FDIC-controlled companies are now required to provide details of planned activities and proposed timing of transactions. The agency plans to review such information for safety and reliability, financial stability and consumer protection.