In response to the Treasury Department’s recent request for comment on ensuring the responsible development of digital assets, the American Bankers Association has set out to regulate banks and nonbanks to ensure consumer protection and support responsible innovation in digital asset markets. reiterated its position that there is a need for clarity and equality between
Digital assets have the potential to enable “increased efficiencies, new products, and new ways to deliver traditional products,” the ABA wrote in it. comment letterbanks “responsibly research and innovate within regulatory frameworks that ensure consumer protection and limit systemic risk. The same cannot always be said for non-banks.” The ABA has expressed concern that there has been little movement to curb non-bank cryptocurrency companies since Executive Order 14067, “Ensuring the Responsible Development of Digital Assets,” was issued in March.
An important first step is for regulators to develop a “clear definition” of digital products that groups assets by risk. “Surveillance and supervision should be applied alike to banks and non-banks engaged in digital asset activities to ensure that all customers are equally protected regardless of their involvement with financial markets,” the ABA said. increase. The ABA also expressed “serious concerns” about the applicability of Security and Trade Commission Staff Accounting Bulletin 121 to regulated banking organizations protecting crypto assets. SAB 121 “puts banks at a competitive disadvantage in providing cryptocurrency custody services compared to providers that are not carefully regulated,” the ABA wrote, stating that regulated banks Blocking entry into the crypto custody market “will push digital asset activity outside regulatory boundaries and make it less secure for consumers.”