Washington, D.C. (Jan. 27, 2023) — Independent Community Bankers of America (ICBA) President and CEO Rebeca Romero Rainey issued the following statement on today’s federal actions to help mitigate the risks posed by crypto-asset firms.
“The denial of Custodia Bank’s application to become a member of the Federal Reserve System, the Fed’s policy statement clarifying that its regulatory limitations apply to both insured and uninsured depository institutions, and the White House’s statement on crypto-assets and stablecoins appropriately reflect the risks posed by special-purpose depository institutions and digital assets.
“As the Fed indicated in its policy statement, uninsured depository institutions should not be allowed to become Fed members while engaging in activities that are not permitted for banks because they are considered unsafe and unsound. This appropriately safeguards the banking system from the risks posed by institutions with novel charters and from the crypto sector, reflecting ICBA concerns laid out in recent comments on accessing Fed master accounts.
“Meanwhile, the White House’s statement calling for a broader policy response to crypto-assets echoes ICBA’s long-standing calls for policymakers to develop a clear regulatory framework for crypto, to focus on crypto’s role in facilitating financial crimes, and to ensure the traditional banking system continues to be a safe haven from the crypto sector’s instability.
“As Washington considers the risks and potential policy response to digital assets, ICBA reminds policymakers that the nation’s community bankers are rightly concerned about the privacy, cybersecurity, and systemic risks posed by cryptocurrency. Policymakers should prioritize protecting national security amid ongoing instability in the crypto markets while collaborating on a comprehensive regulatory framework that utilizes more effective alternatives to a U.S. central bank digital currency — including the FedNow instant payments service.”
The Independent Community Bankers of America® creates and promotes an environment where community banks flourish. ICBA is dedicated exclusively to representing the interests of the community banking industry and its membership through effective advocacy, best-in-class education, and high-quality products and services.
With nearly 50,000 locations nationwide, community banks constitute roughly 99 percent of all banks, employ nearly 700,000 Americans and are the only physical banking presence in one in three U.S. counties. Holding more than $5.8 trillion in assets, over $4.8 trillion in deposits, and more than $3.5 trillion in loans to consumers, small businesses and the agricultural community, community banks channel local deposits into the Main Streets and neighborhoods they serve, spurring job creation, fostering innovation and fueling their customers’ dreams in communities throughout America. For more information, visit ICBA’s website at www.icba.org.