Yahoo Finance's Jennifer Schonberger discusses details of the latest policy agenda on how U.S. regulators are looking at cryptocurrencies and the potential of national banks accepting them.
AKIKO FUJITA: With 2021 coming quickly to an end, financial regulators are drawing up their roadmap for crypto regulation in 2022. That so-called crypto sprint officially unveiled on Tuesday. Let's bring in Yahoo Finance's Jennifer Schonberger.
I was talking so much about the sprint, not necessarily being a crawl that I can even say the word. But talk to me about what's included in this roadmap and what we can expect.
JENNIFER SCHONBERGER: Hey there, Akiko. That's right. US financial regulators out with their policy agenda for how to regulate cryptocurrencies. The so-called crypto sprint, as regulators are calling it, sketches out a to-do list for 2022 that will offer crypto players more clarity into the rules of the road ahead. Something that the industry has been clamoring for.
It summarizes plans by the Federal Reserve, the FDIC, and the Comptroller of the Currency for what banks can legally do within crypto and how they should comply with current regulations on the books. Regulators will focus on oversight of how banks could store crypto assets safely, handling, exchanging customers dollars for cryptocurrencies, settling trades, and issuing loans backed with crypto.
The agencies are also looking at assessing capital requirements for holding crypto assets. On the back of this, the Comptroller of the Currency is clarifying that national banks can engage in cryptocurrency activities so long as they have approval from their regulator. Should note that few banks actually play in the crypto space right now. But if they wanted to, they would need approval from the OCC.
Acting Comptroller of the Currency, Michael Hsu, saying, in a statement, "Providing this clarity will help ensure that these cryptocurrency, distributed ledger, and stablecoin activities will be conducted by national banks and federal savings associations in a safe and sound manner. This will provide assurance that crypto asset activities taking place inside of the federal regulatory perimeter are being conducted responsibly." Now, Akiko, regulators expected to provide more details on this in 2022. Back to you.
JARED BLIKRE: And, Jennifer, I just want to follow up here. I was reading your article on "Yahoo Finance". I encourage everybody to read it here. At the end, you talk about something interesting I hadn't thought about, which is, there's an open supervisory role at the Federal Reserve right now.
We know that the chair is being retained by Powell and we know that Lael Brainard is going to be the vice chair. But the head of supervision has yet to be determined. And I wonder if there's going to be some regulatory aspect with respect to crypto. There could be some effects there.
JENNIFER SCHONBERGER: Thanks so much, Jared. Yeah, absolutely. As you mentioned, we do have a vacancy that's going to open up in December on the Federal Reserve Board of Governors-- The vice chair of supervision. And that person could absolutely put their stamp on regulations for stablecoins and cryptocurrencies.
So while regulators currently in place are outlining what they think should be the rules of the road, that person who assumes that position could have a very big impact on that. Now members of the Senate, specifically Senator Elizabeth Warren, has said that this particular position is very important in terms of cracking down on banking regulations.
She's encouraged President Biden to put somebody who's a bit more strict than perhaps Fed Chair Powell has been on this in that position. So depending on who the president nominates and who is confirmed by the Senate, this could absolutely have implications for the crypto space.
JARED BLIKRE: Yes, and it's going to be really interesting to see how all of this plays out. Thank you for that report, "Yahoo Finance's" Jennifer Schonberger.