Per a Reuters report, the Federal Deposit Insurance Corporation (FDIC) Chair Jelena McWilliams claims regulators in that country are exploring a “clear path” to allow banks and clients to hold Bitcoin and other cryptocurrencies.
Related Reading | CFTC Commissioner Stresses: Ethereum Is Under Our Jurisdiction
In doing so, the U.S. officials are looking to incentivize these entities to hold their Bitcoin within the country’s regulated corporations and maintain some level of control over the crypto space. McWilliams clarified that the decision is being considered by a team of U.S. bank regulators, as Reuters reported.
In that way, these regulators expect to provide a roadmap for banks to jump into the Bitcoin and crypto market. Included within the roadmap are potential rules over how a bank can hold the crypto-asset, its custody, clients trading with crypto-based products, BTC, and others use as collateral to take loans and others.
Related Reading | Crypto Mom Fires Back, Proposes “Way Forward In Crypto Regulation”
If approved, the roadmap could usher a new wave of Bitcoin and crypto adoption, opening the door for millions of people to have a traditional gateway into the crypto industry, crypto services, and financial products based on this new asset class. The FDIC Chair said the following:
I think that we need to allow banks in this space, while appropriately managing and mitigating risk. (…) If we don’t bring this activity inside the banks, it is going to develop outside of the banks. (…) The federal regulators won’t be able to regulate it.
Keeping Bitcoin And Crypto In U.S. Soil
McWilliams expressed a similar stance to SEC Commissioner Hester Peirce and other crypto-friendly officials in the U.S. government. In other words, she believes in creating incentives to keep Bitcoin and the crypto industry from migrating abroad.
Related Reading | Amidst the NFT Boom, SAKURA Brings High-End Innovation to the NFT Sector
In addition, the FDIC Chair wants to protect consumers from accessing unregulated and potentially inefficient products to gain crypto exposure. The ultimate objective is for the main bank regulators in the U.S., the FDIC, the Office of the Comptroller of the Currency (OCC), and the Federal Reserve to have a unified approach to cryptocurrencies. McWilliams said:
My goal in this interagency group is to basically provide a path for banks to be able to act as a custodian of these assets, use crypto assets, digital assets as some form of collateral. At some point in time, we’re going to tackle how and under what circumstances banks can hold them on their balance sheet.
According to the report, regulators seem to disagree on how to allow Bitcoin and other cryptocurrencies to become collateral due to its volatile price action. In that sense, McWilliams added:
The issue there is … valuation of these assets and the fluctuation in their value that can be almost on a daily basis. You have to decide what kind of capital and liquidity treatment to allocate to such balance sheet holdings.
As of press time, Bitcoin (BTC) trades at $62,537 with a 2% loss in the daily chart.