US Fed Clears Way for Crypto Banks to Operate Central Banking System – The United States Federal Reserve announced on Monday that it will release final instructions for new financial institutions to access their “primary account”, which such companies need to join. into the global payment system. Monday’s announcement.
appears likely to bring the US central bank closer to allowing Wyoming’s Special Purpose Depository Institutions (SPDIs), such as Custodia (formerly Avanti) and the Bank Kraken customers, access these accounts so they don’t need intermediary banks. The Fed first released the guidance last year, opening up a process for requesting comment. Nearly 300 respondents submitted comments, leading to the second public feedback process earlier this year.
In a statement, Fed Vice President Lael Brainard said, “The new guidelines provide a consistent and transparent process for evaluating Federal Reserve account applications and access to federal funds. payment services to support a secure, comprehensive and innovative payment system”.
The guidelines are largely similar to those first proposed in 2021 and would create a decentralized system for the Fed to tailor its review process to grant access based on the type of financial institution main applies. Each level corresponds to a correspondingly more rigorous testing process. According to the guidelines, Tier 1 banks will be federally insured. Tier 2 banks will not be federally insured but will remain “subject to the careful supervision of the federal banking authority.”
The third tier covers businesses that are “not federally insured and not subject to careful federal banking supervision,” most likely to apply to crypto banks in Wyoming.
According to a statement published with the guidance and press release, the Fed received a response after issuing both the initially proposed guidance in 2021 and the updated guidance earlier this year. Many of these commenters submitted a form letter, but the Fed appears to have received a short number out of 70 unique replies.
“On the other hand, many commentators recommend that the proposed guidelines provide a more difficult path for new-chartered organizations to access accounts and services. Many of these This commentator argues that the proposed guidelines should be subject to federally uninsured institutions.The types of requirements apply to federally insured depository institutions, regardless of model. What is the business of that institution,” the document states.
Custodia and Kraken both requested master account access in 2021, shortly before the Fed made its initial proposal.
Bank executives Kraken David Kinitsky told CoinDesk at the time that the proposal was a positive step for his business.
“There’s nothing new about the elements they’ve included here. This is exactly the kind of thing the Federal Reserve is looking at, in terms of risk to the reserve itself, risk to the payment system [and] risk to the economy,” he said.
Both companies received routing numbers earlier this year, an important step in gaining access to the main account (although this does not suggest that the companies will be guaranteed access) .
However, Custodia sued the Fed in June for allegedly violating the mandatory year-end deadline to decide whether to grant access to the Wyoming company.