Op-ed: Crypto response must protect banking system stability

Nov. 22, 2022

The collapse of the FTX cryptocurrency exchange is a predictable example of the serious risks that digital assets pose, and policymakers should ensure new policies directed at the sector fully reflect its risks, ICBA President and CEO Rebeca Romero Rainey wrote in a new op-ed.

Crypto Flaws: On Medium, Romero Rainey said the latest in a long series of crypto failures validates what community banks have long warned—the crypto sector is fragile, prone to facilitating financial crime, entirely lacking in the protections available in the banking system, and ultimately a poor alternative to banking locally.

ICBA Recommendations: In the op-ed, Romero Rainey calls on policymakers to focus on crypto’s role in facilitating financial crimes, address decentralized finance, and ensure the traditional banking system continues to be a safe haven from the crypto sector’s instability.

FHFA Push: In a separate American Banker op-ed published last week, Romero Rainey said Federal Housing Finance Agency accounting standards that require banks to count losses that have not been realized in their capital calculations are threatening to cut off access to Federal Home Loan Bank advances, a key source of liquidity.