FDIC
The Federal Deposit Insurance Corporation, Board of Governors of the Federal Reserve System, and the Office of the Comptroller of the Currency recently issued a statement on the liquidity risks to banking organizations presented by certain sources of funding from crypto-asset related entities. The statement reminds banking organizations to apply existing risk management principles and provides examples of practices that could be effective. Banking organizations are neither prohibited nor discouraged from providing banking services to customers of any specific class or type, as permitted by law or regulation.
Highlights:
Highlights:
- In light of events that highlight a number of risks associated with crypto–assets and crypto-asset sector participants, the agencies issued a statement in January 2023 addressing key risks and are now issuing a statement related to liquidity risks.
- Banking organizations that use certain sources of funding from crypto–asset–related entities may be exposed to heightened liquidity risks due to the unpredictability of the scale and timing of deposit inflows and outflows.
- Examples of these sources of funding include, among others, deposits placed by a crypto–asset–related entity that are for the benefit of the crypto–asset–related entity’s customers (end customers) and deposits that constitute stablecoin–related reserves.
- In light of these heightened risks, it is important for banking organizations that use certain sources of funding from crypto–asset–related entities to actively monitor the liquidity risks inherent in such funding sources, and establish and maintain effective risk management practices.
Additional FDIC Resources
FDIC releases initial FAQ on January 5, 2015
Revised FAQs released on November 13, 2015
Second Revision released on June 30, 2016
U.S. Rep. Tipton (R-CO) introduces Protect Prepaid Accounts Act (2016)
IPA meeting with FDIC Chair Jelena McWilliams (July 24, 2018)
IPA Op-ed: Taking a Second Look at the FDIC’s Brokered Deposit Definition (Sept. 7, 2018)
FDIC releases ANPR on Brokered Deposits in December 2018
IPA meeting with FDIC General Counsel Nick Posiadly on July 24, 2019
IPA Op-ed: For the Sake of Payments Innovation, Deposit Insurance Must Enter the 21st Century (Nov. 11, 2019)
Revised FAQs released on November 13, 2015
Second Revision released on June 30, 2016
U.S. Rep. Tipton (R-CO) introduces Protect Prepaid Accounts Act (2016)
IPA meeting with FDIC Chair Jelena McWilliams (July 24, 2018)
IPA Op-ed: Taking a Second Look at the FDIC’s Brokered Deposit Definition (Sept. 7, 2018)
FDIC releases ANPR on Brokered Deposits in December 2018
IPA meeting with FDIC General Counsel Nick Posiadly on July 24, 2019
IPA Op-ed: For the Sake of Payments Innovation, Deposit Insurance Must Enter the 21st Century (Nov. 11, 2019)
| The IPA (NBPCA) unsolicited comment letter and white paper on Dec. 23, 2015 |
| IPA comment responding to the ANPR on Brokered Deposits on April 18, 2019 |
| IPA Comment Letter to FDIC Regarding Advertising RFI |
| IPA Comment Letter to FDIC Regarding Advertising RFI |
| Unsafe and Unsound Banking Practices: Brokered Deposits Restrictions (Final Rule) |
OCC
| IPA_Comments to OCC on ANPR July 29, 2020 |
| Chairman Crapo Letter to OCC Sept. 1, 2020 |