Responding to the Treasury Department’s current ask for talk about making sure the accountable advancement of digital properties, the American Bankers Association repeated its position that regulative clearness and parity for banks and nonbanks is essential to make sure customer securities and assistance accountable development in the digital possession market.
Digital properties have the possible to allow “enhanced efficiencies, new products and new ways to deliver traditional products,” ABA composed in its remark letter, keeping in mind that banks are carrying out research study and development “responsibly and within a regulatory framework that ensures consumer protection and limits systemic risk. The same cannot necessarily be said for nonbanks.” ABA revealed its issue that because Executive Order 14067 “Ensuring Responsible Development of Digital Assets” was released in March, there has actually been little activity to check nonbank crypto business.
An essential initial step is for regulators to establish “clear definitions” of digital items that group properties by threat. “Oversight and supervision should be applied to banks and nonbanks engaged in digital asset activities alike to ensure all customers are protected equally, regardless of where they engage with the financial marketplace,” ABA composed. ABA likewise revealed its “serious concerns” with the applicability of the Security and Exchange Commission’s Staff Accounting Bulletin 121 to regulated banking companies that secure crypto properties. SAB 121 puts banks at a “competitive disadvantage in providing cryptocurrency custody services relative to providers that are not prudentially regulated,” ABA composed, including that avoiding controlled banks from going into the cryptocurrency custody market “pushes digital asset activity outside the regulatory perimeter, making it less safe for consumers.”