DLT technology and digital assets, including stablecoins and cryptocurrencies, can enhance the functionality of financial services, but banks should be wary of adopting such tools, as warned by the OCC of the US Treasury in its semi-annual risk report.
The regulator has drawn attention to the risks of this class of assets. The OCC has urged banks and other regulated institutions to obtain approval before offering such services, in particular custody, derivatives and access to third party products. Per the report:
“This involves providing expertise to identify and address strategic, operational, regulatory and reputational risks. Sound product management also includes alignment with the bank’s strategic goals, investment profile, resources and expertise.”
The OCC has promised that in 2022 it will provide additional recommendations regarding the integration of cryptocurrencies into the product lines of banks.
In May, it was started an “interdepartmental sprint” with the participation of the Fed, FDIC and OCC, which will continue in 2022. The result of these efforts will be to define the areas of responsibility of each regulator and build a cooperation mechanism.