Fed Shutters Group That Polices Banks’ Crypto Activities

Fed Shutters Group That Polices Banks' Crypto Activities

Table of Contents

Join us cable A channel to stay in view of the coverage of urgent news

The US Federal Reserve said that it will close the “supervision of new activities”, a group established in 2023 to monitor bank participation with companies in the encryption space.

“Since the Board of Directors began its program to oversee some encryption and technology activities in banks, the Board of Directors has strengthened its understanding of these activities, relevant risks and banking management practices,” the Federal Reserve Bank said on August 15. Notice.

Instead of an independent initiative, the program will now integrate its “knowledge and supervision of these activities in the standard supervision process,” said the Federal Reserve. It will also cancel the supervisory message 2023 that created the program.

The Fed program was created in the wake of the collapse of 2023 encryption

The initiative was created five months after the collapse of three main American lenders who were in close position with the encryption industry and the startups of technology, which are Silvergate, Silicon Valley Bank and the signature bank.

The collapse began when the encryption prices began to decline amid concerns about Silvergate’s health after the collapse of November 2022 to exchange the encryption that has now ended, FTX.

At that time, Silvergate was deeply firmly established in the encryption industry, with approximately 90 % of its deposits and then related to digital assets.

The FTX collapsed raised mass withdrawals, as it informed Silvergate that it had lost $ 8 billion of deposits. The bank also had to realize a loss of about $ 718 million for its investments just to cover withdrawals.

Then the panic from Silvergate was spread to SVB Bank (SVB), which was not strongly involved in the encryption space but felt the repercussions of Silvergate’s collapse due to its exposure to many VC -supported startups and companies that interfere with companies in the digital asset industry.

Finally, this panic faded to the signature bank, which ended under pressure from a wave of withdrawals.

At one point, the Signature Bank withdrawals amounted to $ 10 billion in one day, forcing the bank to close its offer, which is a network of banks that exchanged like Coinbase. This reduces liquidity in the encryption space.

The organizers choose a more soft approach to overseeing encryption during the Trump era

The closure of the supervision program for new activities does not necessarily indicate a return to the supervision of banks that participate with encryption companies, but it comes in the direction of the US government agencies that reduce their supervision of the encryption industry under the Donald Trump administration.

Since the beginning of the year, the US Securities and Stock Exchange Committee (SEC) has dropped many investigations and enforcement procedures in encryption companies. SEC Paul Atkins President also announced the “Project Crypto” initiative, with the aim of reducing licensing requirements for encryption companies.

During the appearance of Fox Business yesterday, ATKINS said that the agency “worship” all its various departments and offices “to implement the recommendations from the Trump encryption group to make the United States more suitable for encryption.

Interview with ATKINS with Fox Business

Atkins speak to Fox Business (Source: Fox’s work))

This includes controlling the rules that “had been present 90 years ago or so.”

He added: “We do not want the encryption assets to be on a flash drive in a person’s drawer.” “They must be in a safe place … The reason for doing all this and treating these different regulations is to provide some certainty to people.”

Related articles:

Best portfolio – diversification of your encryption portfolio

Best portfolioBest portfolio
  • Easy to use
  • Get early access to iCOS, the next distinguished code
  • Multiple, multi -province, non -guardian
  • Now in the application store, Google Play
  • Class to earn the original code is the best
  • More than 250,000 active monthly users

Best portfolioBest portfolio


Join us cable A channel to stay in view of the coverage of urgent news

Our offer on Sallar Marketplace