{"id":10672,"date":"2023-03-02T07:02:57","date_gmt":"2023-03-02T07:02:57","guid":{"rendered":"http:\/\/cryptoheretostay.com\/?p=10672"},"modified":"2023-03-02T07:02:58","modified_gmt":"2023-03-02T07:02:58","slug":"us-regulators-and-federal-reserve-issue-joint-warning-about-crypto-liquidity-risks","status":"publish","type":"post","link":"https:\/\/cryptoheretostay.com\/?p=10672","title":{"rendered":"US Regulators and Federal Reserve Issue Joint Warning About Crypto Liquidity Risks"},"content":{"rendered":"<p> <script type=\"text\/javascript\">\r\namzn_assoc_placement = \"adunit0\";\r\namzn_assoc_tracking_id = \"totafreearti-20\";\r\namzn_assoc_ad_mode = \"search\";\r\namzn_assoc_ad_type = \"smart\";\r\namzn_assoc_marketplace = \"amazon\";\r\namzn_assoc_region = \"US\";\r\namzn_assoc_default_search_phrase = \"crypto\";\r\namzn_assoc_default_category = \"All\";\r\namzn_assoc_search_bar = \"false\";\r\namzn_assoc_title = \"\";\r\namzn_assoc_rows =\"1\";\r\n<\/script>\r\n<script src=\"\/\/z-na.amazon-adsystem.com\/widgets\/onejs?MarketPlace=US\"><\/script><br \/>\n<\/p>\n<p><strong>U.S. regulators and the Federal Reserve have issued a joint warning about key liquidity risks associated with crypto assets. However, <\/strong><strong>the regulators clarified that banks \u201care neither prohibited nor discouraged from providing banking services to customers of any specific class or type, as permitted by law or regulation.\u201d<\/strong><\/p>\n<h2>US Regulators Issue Joint Statement on Crypto<\/h2>\n<p>The Board of Governors of the Federal Reserve System, the Federal Deposit Insurance Corporation (FDIC), and the Office of the Comptroller of the Currency (OCC) jointly issued a statement regarding crypto on Thursday.<\/p>\n<p>The Federal Reserve, the FDIC, and the OCC explained that their statement \u201chighlights key liquidity risks associated with crypto assets and crypto-asset sector participants that banking organizations should be aware of.\u201d They warned:<\/p>\n<p>In particular, certain sources of funding from crypto asset-related entities may pose heightened liquidity risks to banking organizations due to the unpredictability of the scale and timing of deposit inflows and outflows.<\/p>\n<p>For example, the stability of deposits by crypto entities for the benefit of their customers may be driven by \u201cthe behavior of the end customer or crypto-asset sector dynamics, and not solely by the crypto-asset-related entity itself, which is the banking organization\u2019s direct counterparty,\u201d the regulators cautioned. \u201cSuch deposits can be susceptible to large and rapid inflows as well as outflows, when end customers react to crypto-asset-sector-related market events, media reports, and uncertainty.\u201d<\/p>\n<p>Another example is deposits that \u201cconstitute stablecoin-related reserves,\u201d which may be \u201csusceptible to large and rapid outflows,\u201d including from \u201cunanticipated stablecoin redemptions or dislocations in crypto-asset markets,\u201d the regulators detailed.<\/p>\n<p>Banking organizations using funding sources from crypto entities need to actively monitor liquidity risks and establish effective risk management and controls, the Federal Reserve, the FDIC, and the OCC advised. While emphasizing that banking organizations should apply existing risk management principles to crypto, the regulators clarified:<\/p>\n<p>Banking organizations are neither prohibited nor discouraged from providing banking services to customers of any specific class or type, as permitted by law or regulation.<\/p>\n<p>The Fed, the FDIC, and the OCC also issued a joint warning about crypto risks in January. The regulators mentioned fraud, scams, legal uncertainties, inaccurate or misleading representations by crypto companies, significant volatility in crypto markets, run risks, and contagion risks.<\/p>\n<p>Tags in this story<\/p>\n<p>crypto liquidity risks, crypto risks, FDIC, FDIC crypto, Fed, Fed board, Federal Reserve, Federal Reserve crypto, OCC, occ crypto, US regulators crypto<\/p>\n<p><em><strong>What do you think about the joint warning about cryptocurrency by the Federal Reserve, the FDIC, and the OCC? Let us know in the comments section below.<\/strong><\/em><\/p>\n<p>Kevin Helms <\/p>\n<p class=\"article__body__author__info__about\">\nA student of Austrian Economics, Kevin found Bitcoin in 2011 and has been an evangelist ever since. His interests lie in Bitcoin security, open-source systems, network effects and the intersection between economics and cryptography.<\/p>\n<p><i class=\"td-icon-font td-icon-mail-1\"\/><\/p>\n<p class=\"images_credits\"><em>Image Credits: Shutterstock, Pixabay, Wiki Commons<\/em><\/p>\n<p><strong>Disclaimer<\/strong>: This article is for informational purposes only. It is not a direct offer or solicitation of an offer to buy or sell, or a recommendation or endorsement of any products, services, or companies. Bitcoin.com does not provide investment, tax, legal, or accounting advice. Neither the company nor the author is responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods or services mentioned in this article.<\/p>\n<p>More Popular NewsIn Case You Missed It<\/p>\n<p><script type=\"text\/javascript\">\r\namzn_assoc_placement = \"adunit0\";\r\namzn_assoc_tracking_id = \"totafreearti-20\";\r\namzn_assoc_ad_mode = \"search\";\r\namzn_assoc_ad_type = \"smart\";\r\namzn_assoc_marketplace = \"amazon\";\r\namzn_assoc_region = \"US\";\r\namzn_assoc_default_search_phrase = \"bitcoin\";\r\namzn_assoc_default_category = \"All\";\r\namzn_assoc_search_bar = \"false\";\r\namzn_assoc_title = \"\";\r\namzn_assoc_rows =\"1\";\r\n<\/script>\r\n<script src=\"\/\/z-na.amazon-adsystem.com\/widgets\/onejs?MarketPlace=US\"><\/script><br \/>\n<br \/><a href=\"https:\/\/news.bitcoin.com\/us-regulators-and-federal-reserve-issue-joint-warning-about-crypto-liquidity-risks\/\" target=\"_blank\" rel=\"noopener\">Source<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>U.S. regulators and the Federal Reserve have issued a joint warning about key liquidity risks associated with crypto assets. However, the regulators clarified that banks \u201care neither prohibited nor discouraged from providing banking services to customers of any specific class or type, as permitted by law or regulation.\u201d US Regulators Issue Joint Statement on Crypto [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":10673,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":"","_wp_rev_ctl_limit":""},"categories":[1],"tags":[],"class_list":["post-10672","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-crypto-updates"],"_links":{"self":[{"href":"https:\/\/cryptoheretostay.com\/index.php?rest_route=\/wp\/v2\/posts\/10672","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/cryptoheretostay.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/cryptoheretostay.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/cryptoheretostay.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/cryptoheretostay.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=10672"}],"version-history":[{"count":1,"href":"https:\/\/cryptoheretostay.com\/index.php?rest_route=\/wp\/v2\/posts\/10672\/revisions"}],"predecessor-version":[{"id":10674,"href":"https:\/\/cryptoheretostay.com\/index.php?rest_route=\/wp\/v2\/posts\/10672\/revisions\/10674"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/cryptoheretostay.com\/index.php?rest_route=\/wp\/v2\/media\/10673"}],"wp:attachment":[{"href":"https:\/\/cryptoheretostay.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=10672"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/cryptoheretostay.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=10672"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/cryptoheretostay.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=10672"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}