Major US Banking Regulators Finish “Policy Print” and Release 2022 Crypto Roadmap

Major US Banking Regulators Finish “Policy Print” and Release 2022 Crypto Roadmap

Top US banking regulator said on Tuesday that banks must seek and obtain written permission from their bank supervisors before engaging in cryptocurrencies.

The Office of the Comptroller of the Currency said that before taking on activities like providing custody services for crypto assets, banks must demonstrate they have appropriate risk management tools.

“I said the next few years will be the most important in the history of crypto policy,” commented Jake Chervinsky, head of Policy Blockchain Association. “Here’s proof: the major US banking regulators just finished a crypto “policy sprint” & say 2022 will be a big year. Get ready.”

On Tuesday, the Federal Reserve, Federal Deposit Insurance Corporation, and OCC released a joint statement, saying that they see the potential opportunities presented by the emerging crypto asset sector, but at the same time, they recognize the risks for banking organizations, their customers, and the overall financial system.

To provide clarity, the agencies recently conducted a series of inter-agency “policy sprints” focused on crypto and are now providing a roadmap of future planned work.

The focus of the sprint work included developing a commonly understood vocabulary, identifying and assessing key risks, including considering legal permissibility related to potential crypto activities conducted by banking organizations, and analyzing the applicability of existing regulations and guidance.

The staff also reviewed and analyzed activities banks may be interested in, such as crypto asset custody, facilitation of customer purchases and sales of crypto, loans collateralized by crypto, activities involving payments and stablecoins, and those that may result in the holding of crypto on a banking organization’s balance sheet.

The agencies said they would also evaluate the application of capital and liquidity standards to crypto for US banks. In addition, they will continue to engage with the Basel Committee on Banking Supervision and other relevant authorities.

“Based on this preliminary and foundational staff-level work, the agencies have identified a number of areas where additional public clarity is warranted.”

As a result, the agencies have developed this roadmap for cryptocurrencies. Throughout 2022, they plan to provide greater clarity on whether certain crypto-related activities conducted by banks are permissible, compliance with existing laws and regulations, and expectations for safety and soundness.

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Author: AnTy

Crypto Lender, Genesis, New Loans Issuance Hits $2B In Q1 For Its Largest Quarter Ever

Renowned crypto lender Genesis Global Capital has revealed a healthy finish of the first quarter of this year.

In its latest quarterly lending report shared with Bitcoin Exchange Guide, the company revealed that it issued approximately $2 billion in new loans in the just concluded first quarter of this year. This was double the amount issued in Q4 2019 which was $1 billion.

According to the report, throughout Q1, the firm was able to enhance its active amount of active trading loans by about 19% rising to $649 million. However the firm suffered some considerable volatility. At the start of the year, the firm opened its loan book at $545 million which almost doubled to about $1 billion by February.

The firm was plunged into uncertainties in early March after the effects of Coronavirus started to spread to the world affecting the equities and the bond markets.

The crypto market experienced chaos in March as Bitcoin prices nosedived by more than 50% in 24 hours on March 12, commonly known as ‘black Thursday’. This was the worst Bitcoin plummeting in a single day for 7 years. Genesis was able to deal with the market shock by originating “a significant portion of the entire quarter’s loans during the month of March and never once paused lending activity.”

Following the events of ‘black Thursday’ the firm’s lending desk didn’t register any default from its more than 45 clients following the market sell-off. However, lending was temporarily halted to borrowers since it was hard to determine the right interest rate due to volatility.

According to Genesis CEO, Michael Moro the pausing of the lending activities was necessary to avoid the collapse of the firm. He explained:

“I just didn’t want that risk on the Genesis balance sheet. After we felt like markets had calmed down, we reopened the dialogue and restarted the origination machine.”

Moro explained that although volatility is a normal aspect in the crypto market, this was just so much in a single day.

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Author: Joseph Kibe