Aug 9, 2023

The U.S. Federal Reserve is kicking off a new program for overseeing banks’ crypto activity, and it further clarified its requirement that the lenders under its authority get approval before engaging in digital assets activities.

Video transcript

The fed starts a new program to oversee how US banks are interacting with the crypto economy. This kind of comes in the wake of the paypal Stable coin news, which I think is an interesting note. And I think this is a fascinating story because I can just imagine all the conversations behind the scenes that are not captured in this story but are clearly happening in DC and New York. I'm thinking of Caitlin Long and custodian Bank and others in the digital asset space who are fighting for a more clear rules of the road as it relates to how they can do business in concert with the US banking system. I'm gonna throw this straight to will for his thoughts. Um Interesting development kind of interestingly timed hard to say if one is in response to the other, probably not, I would guess but clearly crypto as it relates to the recent banking crisis, uh was certainly a top of a conversation a few months ago. What are your thoughts? Yeah, definitely it was and I think we move on from stories so quickly. But what happened back in February with those three banking failures in their relation to crypto definitely has repercussions for a lot of these people in the traditional financial world and especially those in government who are looking at these things and thinking, hey, probably don't want to run that one back again and they often have a different angle than people in Bitcoin and crypto do. So. They're gonna study this, come to some conclusions and probably pass some laws, right? That people in Bitcoin don't like gasps that's probably going to occur. Uh at the same time that we have this headline here, we also have three bills shuffling their way in Washington DC. We have ad I bill a stable coin bill, uh I believe one other which is I'm blanking on right now, but there are three bills going through different parts of the House and Senate committees and those are going to change how we view all these topics. The fed it seems is moving a little bit quicker in different angle. You know, they have a regulatory body, they're able to do some things on the side. They mostly seem to be concerned about stable coins and allowing banks to use stable coins and having oversight into that. I would suppose that stable coins become part of banking within the next five years, like a pretty mainstream part of it for most banks, uh especially with the paypal announcement yesterday, but the fed is definitely going to get its pound of flesh here. They're definitely going to look into it and have a ton of oversight over everything. Jen. I heard a big sigh from Wendy, so I want to know what's behind that. Um There's not really a big sigh, too big of a sigh. Um, it's more so, how many different stable coins are we going to have in the United States of America? We have one fiat currency and I feel like we're gonna have all of these different stable coins. It's gonna get very confusing because the government is just gonna keep printing money out. We're not really going to know what the total supply of all this stuff is because it's gonna keep changing. And I don't, I'm, I, I, I'm not really getting a good read on what is happening. Like the title starts a new program to oversee crypto activity in us banks, but it feels more so for staple coins, not for actual crypto assets. And don't we need regulation for crypto assets first before we need regulation for staple coins? Because those seem a lot easier to regulate because it's how much cash reserves you have, how many bonds, how many assets, how much, you know, what is, what is the printing mechanism? What is the there, is there a burdening mechanism? So it feels like it's much easier to regulate stable coins. But what about crypto assets? That's the big, that's the big question. That's the big $1 trillion question. As this asset class continues into the future.

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