By Pete Schroeder
WASHINGTON, Dec 9 (Reuters) – Banks will be allowed to act as intermediaries on crypto transactions, a national U.S. bank regulator said on Tuesday, in the latest step by the Trump administration to narrow the gap between the traditional financial sector and crypto activities.
The Office of the Comptroller of the Currency issued new guidance saying that banks can engage in what are known as “riskless principal” transactions that involve crypto assets and would not receive scrutiny from the regulator.
In such transactions, banks effectively act as brokers, buying assets from one counterparty while simultaneously entering into a transaction to sell those assets to another counterparty. The bank does not hold on to any crypto assets in inventory as part of the process, except in rare circumstances, the OCC said.
U.S. President Donald Trump has taken a welcoming approach to the crypto sector, rewriting rules and removing guardrails, while his family engages in crypto ventures.
Critics say such changes have made the traditional financial sector and the loosely-regulated and volatile world of cryptocurrencies more interconnected, potentially creating systemic risks.
U.S. bank regulators have already withdrawn numerous restrictions on crypto activities by banks established under President Joe Biden. In March, the OCC approved some crypto activities by banks, and scrapped earlier guidance telling firms to seek advance approval from watchdogs before diving into the sector.
(Reporting by Pete Schroeder; editing by Barbara Lewis)
Comments