State Banks that are members of the US federal Reserve The System must obtain a written supervisory clearance from the Fed prior to issuing, holding or transacting Dollar Tokens used to facilitate payments, such as stable coins the central bank said in a new supervisory letter on Tuesday.
The Fed also said that it is creating a new supervisory program to monitor the activities of banks related to cryptocurrencies. blockchain Technology and technology-driven non-bank partnerships with the objective of complementing its existing supervisory process and strengthening monitoring of technology-driven activities.
The new announcements, which were sent to supervisory and examination staff at Federal Reserve banks and state member banks on Tuesday, come just a day after payments giant PayPal announced it would launch its own stablecoin, a type of is currency. cryptocurrency Usually linked to a traditional asset, often the US dollar.
Prior attempts by major mainstream companies to launch stablecoins have faced strong opposition from financial regulators and policymakers. Meta’s Then Facebook, plans to launch a stablecoin, Libra, in 2019 were shelved because regulators feared it could upset global financial stability.
According to the Fed, in order for banks to receive a written clearance to be able to engage with stable coins, banks must demonstrate proper risk management, which includes identifying and managing any potential risks, including cyber security and illicit finance threats. The system must be involved in order to be monitored.
The Fed said that after receiving a written no-objection, state member banks involved in activities related to the dollar token will be subject to supervisory review as well as monitoring of those activities.