According to Cointelegraph, the US authorities started to fight against cryptocurrency firms and banks. “The strategy consists of isolating the traditional financial system from the crypto market”, the article reads. To reach the goal, the US authorities ordered multiple agencies to discourage banks from dealing with crypto firms.
Crypto and traditional banks are facing immense pressure from the Federal Reserve and the Federal Deposit Insurance Corporation (FDIC). “Regulators threaten and bully bank leadership behind the scenes, then publish public ‘guidance’ stressing that banks are still free to custody crypto or service crypto clients,” Nic Carter, a co-founder of venture firm Castle Island and crypto intelligence firm Coin Metrics, said.
Not so long ago, the Fed, the FDIC, and the Office of the Comptroller of the Currency released a joint statement. The document warns about the risks of banks engaging in crypto. What is more, the regulators are encouraging financial organizations to refrain from dealing with cryptocurrencies for safety reasons.
“There is a particular concern with crypto exchanges and related intermediaries that operate outside of the United States,” co-CEO of blockchain fintech Prometheum and counsel at law firm Gusrae Kaplan Nusbaum said.
“Banks are reevaluating whether continuing to provide these services is worth the risk,” he added. Notably, the crypto industry is actively developing. Companies are creating more and more financial services to deal with cryptocurrencies. On the one hand, banks try to act in accordance with the law. On the other hand, financial organizations and cryptocurrency companies should accept the regulations and avoid cryptocurrencies.
One of the priorities for the US regulators is to ban crypto staking services for retail customers. Such restrictions have a considerable impact on the crypto industry. “The consequences for the crypto industry could range from reducing retail holders’ ability to exchange coins for the dollar in addition to crypto exchanges closing operations in the US market and a lack of access to financial innovation,” Carter said.
“The initiatives will be unproductive for the industry and retail investors, empowering ‘shadow banks’ in the country,” Carter predicts.
