Home
News
Crypto firms have received a final guideline to open accounts and payment services that Federal Reserve Banks offer. The Fed published this guideline on August 15. It further revealed that several institutions providing novel charters and offering new products have demanded a ‘master-account.’
The Fed will analyze requests for master accounts with a transparent and consistent set of factors. A peek through in notice revealed how the guideline would function. Institutions that are building accurate supervisory and regulatory frameworks and are involved in novel activities, will go through intense review. On the other hand, a streamlined process will be conducted for institutions with federal deposit insurance.
The institutions referred to in the formal point are mainly those facing harsh scrutiny from the Fed and government agencies. And, these institutions have grown over the last few years in the U.S. Lael Brainard, Vice-chairperson at Fed, who earlier commented on certain aspects of the crypto market, shared his view on the guideline.
Brainard believes the latest guidelines offer a transparent and consistent process to analyze requests for Federal Reserve accounts. In addition, it provides access to payment services for an innovative, inclusive and safe payment system.
According to them, crypto firms will be able to do effective delivery to customers, with the opening of master accounts. It witnessed some development in the past as certain companies applied for bank characters.
Last year, Circle delivered a filing to the United States Securities and Exchange commission (SEC) to receive the title of national bank. Paxos also applied with the Office of the Comptroller of the Currency (OCC), for a national bank charter.
Custodia filed a suit against the Federal Reserve Bank of Kansas City and the Federal Reserve Board of Governors over a delayed application for a master account, earlier this year. Custodia, under a crypto-friendly statute passed in 2019, was chartered in Wyoming in the same year.
For quite some time, the Federal Reserve has pondered over a CBDC. According to Brainard, CBDCs can perfectly co-exist with stablecoins. The Fed released a CBDC report asking for more dialogue on the subject.
Andrew is a blockchain developer who developed his interest in cryptocurrencies while pursuing his post-graduation major in blockchain development. He is a keen observer of details and shares his passion for writing, along with coding. His backend knowledge about blockchain helps him give a unique perspective to his writing skills, and a reliable craft at explaining the concepts such as blockchain programming, languages and token minting. He also frequently shares technical details and performance indicators of ICOs and IDOs.
