US Fed Issues Guidelines For Crypto Firms To Open Master Accounts
The US Federal Reserve has issued guidelines for crypto companies that want to open a master account. These guidelines are what the central bank will use to evaluate their requests. Hence, crypto firms that want a master account must ensure their applications follow the guidelines.
US Fed Provides Guidelines For Crypto Firms To Open A Master Account
According to reports, the US Fed has finally released guidelines to direct crypto firms wanting a master’s account. The central bank noted that several institutions offering new assets have shown interest in “master accounts.”
On August 15th, the Fed released a guideline to direct those firms that want to apply. Meanwhile, the Fed also noted that it would use this template to assess the requests it receives for this kind of account.
Additionally, the bank said it would use a consistent and transparent set of rules for its analysis. The notice also gave more information about the working mechanism of the guideline.
As per the notice, institutions with an FDI (Federal Deposit Insurance) account will have a smooth process. However, the case is different for institutions that are dealing in new activities or those that regulators are still working on regulations for.
The financial institution said these institutions would face stricter and intense reviews. Companies that fall in this last part are crypto firms.
Crypto Firms File For Bank Charter
Moreover, crypto firms have been facing intense scrutiny from government agencies recently. According to Lael Brainard, Vice Chair of the US Fed, the recent guidelines offer a transparent and consistent process for account evaluation.
Brainard added that this would allow the central bank to evaluate numerous accounts and payment service requests. Also, it would foster an inclusive, innovative, and safe payment system.
Meanwhile, most crypto participants have commented on the need for a master account. According to them, it would increase the efficiency of their service delivery to customers.
In the past, some firms had even applied for bank characters. The stablecoin issuer, Circle, sent an application to the SEC in 2021 to approve its institution as a national bank.
Also, Paxos firm has sent the Office of the Comptroller of the Currency an application to become a bank charter.
Meanwhile, the US Fed has been considering issuing a digital Dollar. Before now, the Vice Chair of the Federal Reserve noted that stablecoins and CBDCs could coexist. In January, the Fed released a CBDC report asking for more info on CBDCs and their benefits.
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