Banking regulator issues warning about the impact of crypto

Last Updated on 2 hours by John Piper

A major US banking regulator has warned banks about the risks associated with cryptocurrencies. According to the Office of the Comptroller of the Currency, the entire banking industry should be cautious about digital currencies and cryptos. They should also seek regulatory approval before engaging in the blockchain-based sector.

In a report, the OCC identified “key risks” related to the digital assets sector in the federal banking system. The report identifies several issues, including instability in crypto markets that could impact national currencies, and stablecoins as the most dangerous.

The OCC also noted that there is an increased risk of operation with cyber currencies.

“Operational risks are elevated. Cyber threats are evolving, with threat actors continuing their attacks on the financial services sector with ransomware or other attacks… Hacks and outages continue to be frequent, while fraud and scams remain high in the industry. Some cases have caused confusion .”” due to ownership rights, custody arrangements, financial representations, and financial representations.

According to the OCC report, cryptocurrency volatility and a lack of regulation are likely to threaten financial stability as more companies look to crypto for payment solutions. The banking regulator should be concerned about crypto and tokenized assets in the metaverse. Users can buy and invest in digital assets, which are similar to bank products and services. However, they do not have the same standardised legislation that other asset classes.

It was also mentioned that there might be some risks, as digital assets and the potential of the crypto space are still being discovered.

While crypto-asset services and products may have some similarities with traditional products, there may be new risks due to market structure and underlying tech.

Coin Insider’s first article was entitled “Bank regulator issues warning about crypto’s impact”

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