The Federal Deposit Insurance Corporation (FDIC) is a customer protection agency that monitors the security of commercial organizations and guarantees the funds of their users to protect stakeholders in the event that a bank goes out of business.
Groenberg stated that the FDIC has been investigating the risks associated with crypto-assets since the spring of 2022 while he was speaking at a session held on April 20 at the Brookings Institution. However, this does not imply that he lacks a critical outlook on the field.
The insights and recommendations regarding business
It is possible that the FDIC will offer its business expertise to financial institutions and other national banks that are involved in the trade of cryptocurrencies. Gruenberg lauded Stablecoin in particular for its ability to deliver 24/7 services in an efficient and cost-effective manner. He stated that law should be used to control and regulate stablecoin because it has the potential to profoundly disrupt the financial sector.
As soon as they have a better understanding of the industry as a whole, they, along with a number of other national financing agencies, will start offering their feedback to the various financial firms.
Martin Gruenberg stated that once the FDIC and the government bank collectively gain a deeper understanding of the risks that are associated with these transactions, they will begin providing supervisory commentary to financial firms and intend to develop broader industry guidance on an interagency basis. This is something that Gruenberg said will happen.
Why specifically look into stablecoins instead of other cryptocurrencies?
According to the report published by the FDIC, the cost of stable tokens has the potential to provide three primary advantages over existing currencies that add safety. To begin, they are an area that needs to be carefully monitored, and as a result, they will be safer. The first method to achieve new regulation levels and to separate from deposit return would be to issue settlement stable tokens through a banking system.
In addition, it would be safer to settle stable-coin exchanges within a permitted accounting scheme that featured robust administration and conformity procedures. The enforcement of laws against money laundering and the financing of terrorism, the prohibition of indorsements that do not result in payment, and the identification of all parties impacted by the commercial stable tokens exchange.
To begin addressing these vulnerabilities, ensuring that a plan of action has been developed by the United States Treasury Department to address the risks of illegal financing of digital assets is an important first step.
