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Bank Regulators Clarify That Crypto Qualifies as Collateral Under Capital Reserves Rule

Bank Regulators Clarify That Crypto Qualifies as Collateral Under Capital Reserves Rule

Federal regulators on Thursday said banks do not need to hold additional capital against losses when dealing with crypto currencies, calling their capital reserve rules “technology neutral.” In a joint statement issued by the Federal Reserve, the Federal Deposit Insurance Corp., and the Office of the Comptroller of the Currency the agencies clarified that the “technologies used to issue and transact in a security do not generally impact its capital treatment.”

Accordingly, the statement added, “an eligible tokenized security should be treated in the same manner as the non-tokenized form of the security would be treated under the capital rule. Similarly, a derivative that references an eligible tokenized security should be…

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