Congress Considers Expanding Crypto Rules for Banks, Credit…

AI summary of the source article

Congress is evaluating legislative proposals that would establish clear statutory permissions for U.S. banks and credit unions to hold digital assets, issue stablecoins, and deploy distributed-ledger technology. Rather than deregulating banks' crypto activities entirely, the emerging framework would define permissible operations while leaving capital, liquidity, cybersecurity, and risk management with existing regulators like the OCC, Federal Reserve, and FDIC. The legislation aims to make regulatory permissions more durable, allowing banks to use blockchains for transaction settlements and tokenized securities. Importantly, holding cryptocurrency through banks or holding bank-issued stablecoins would remain distinct from insured bank deposits under the proposed rules.

Why it matters

The changes would represent a new stage in integrating crypto into the financial system by allowing depository institutions themselves to hold digital assets, issue blockchain-based dollars, and use distributed ledgers in ordinary operations.

Key facts

• Proposed legislation would authorize U.S. banks and credit unions to custody digital assets, issue stablecoins, and use distributed ledgers.
• Existing banking supervisors would retain authority over prudential requirements, including capital, liquidity, cybersecurity, and risk management.
• Bank-issued stablecoins and custodial digital assets would remain legally and economically distinct from insured bank deposits.