New York Banks To Seek Crypto Operation Approval From Regulator
The New York financial watchdog has announced a new monetary policy that obligates all banks within the State to get its approval before engaging in any crypto operations. According to the report, the new guideline would take effect in 2023.
New York Regulator Wants Banks To Submit Proposals For Crypto Operations
As blockchain technology continues to rapidly expand its horizon, the raging flames of inflation continue to burn in the financial markets. Financial authorities continue to issue different monetary policies to tackle the acute inflation warring against the economy.
Recently, the Department of Financial Services (DFS) for New York has announced that no bank within the State should associate with cryptocurrency except the regulators have approved them. The new policy reportedly affects all banks and other financial institutes based in the State and licensed by the DFS.
According to the announcement, the regulator subtly reminded financial institutions under it that it is compulsory to check with the department before indulging in any digital assets service. In addition, the regulator released a document that detailed the procedures banks need to take to get approval before venturing into any digital asset.
Per the document, the DFS requires banks to submit a summarized business plan, a well-detailed assets risk management strategy, an accurate description of their customer protection plan, the impact the operation would have on the firm’s financials, and valid regulation analytics.
In addition, the announcement revealed that the proposal should be presented to the DFS about 90 days before the date such banks wish to launch the service. Also, the regulators emphasized that there is no one-size-fits-all concerning the matter. Hence, approval for the previous operation does not count for other activities.
Furthermore, the regulators instructed banks that have already ventured into providing crypto-related services to check with them on how the new policy would affect them.
New York Regulator Aims To Protect Investors With Regulations
Adrienne A. Harris, the Superintendent of DFS, stated that regulators must give crypto companies enough time to comply and adjust to new policies and guidelines. She continued that the DFS made the new policy clear enough to guide every banking agency that wishes to comply rightly.
She added that the policy is paramount to protect investors’ funds from hazardous digital assets operations. In conclusion, she stated that banks registered with the regulator should comply with the new guidelines.
New York City has been actively involved in the race to regulate the crypto industry. It launched its BitLicense in 2014 to become the first State worldwide to issue a license to a crypto firm. In addition, the New York Federal Reserve Bank is holding a three-month trial program on the possibility of a digital USD.
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