On November 23, 2021, the Federal Reserve Board, Federal Deposit Insurance Corporation (“FDIC”), and Office of the Comptroller of the Currency (“OCC”) (together, the “Federal Banking Agencies”) issued a Joint Statement on Crypto Asset Policy Sprint Initiatives and Next Steps (“Joint Statement”), which offers a retrospective summary of the Federal Banking Agencies’ 2021 policy sprints on crypto-asset activities, as well as a priority roadmap for regulatory and guidance clarifications to be offered in 2022.

2021 Retrospective. The Joint Statement summarizes a series of “policy sprints” by the Federal Banking Agencies in 2021 to: (1) develop a common vocabulary regarding use of crypto-assets (i.e., any digital asset implemented using cryptographic techniques); (2) identify key risks and legal permissibility related to potential crypto-asset activities, including based on information submitted in response to the FDIC’s May 2021 Request for Information (“RFI”) on Digital Assets; and (3) assess the applicability of existing regulations and guidance and any gaps or needed clarifications therein. The Federal Banking Agencies also reviewed and assessed a number of crypto-asset activities in which banking organizations may be engaged in currently or in the future to help inform planning for future clarifications in regulation or guidance in 2022.

2022 Roadmap. Per the Joint Statement, over the next year, the Federal Banking Agencies plan to provide greater clarity on the crypto-asset activities and the agencies’ expectations for safety and soundness, consumer protection, and compliance with existing laws and regulations, including anti-money laundering and illicit finance statutes and rules. Based on this preliminary work, the Federal Banking Agencies developed a high-level roadmap for regulation and guidance regarding crypto-asset activities, including six key areas: 

1. Crypto-asset safekeeping and traditional custody services, including “facilitating the customer’s exchange of crypto-assets and fiat currency, transaction settlement, trade execution, recordkeeping, valuation, tax services, and reporting.”
2. Ancillary custody services, such as “staking, facilitating crypto-asset lending, and distributed ledger technology governance services,” which are noted as a potential area for a future RFI.
3. Facilitation of customer purchases and sales of crypto-assets.
4. Loans collateralized by crypto-assets.
5. Issuance and distribution of stablecoins.
6. Activities involving the holding of crypto-assets on balance sheets.

In addition, the Joint Statement indicates the Federal Banking Agencies plan to “evaluate the application of bank capital and liquidity standards to crypto-assets for activities involving U.S. banking organizations and will continue to engage with the Basel Committee on Banking Supervision on its consultative process in this area.” It is unclear whether regulatory or guidance enhancements on this point are likely in 2022.

Overall, the Joint Statement acknowledges the evolving market for crypto-asset activities and the Federal Banking Agencies’ intent to continue monitoring developments in crypto-assets and collaborate with other relevant authorities, as appropriate. Dentons continues to monitor these developments and emerging issues for our clients, including banking organizations, bank services companies, non-traditional financial institutions, and fintech companies. For questions regarding these developments or general guidance regarding crypto-asset activities, financial regulatory compliance, including AML, and privacy and cybersecurity, please contact a member of the Dentons team, below.

Allison J. Bender
Victor Boyajian
Brett Dorman 
Joe Guagliardo
John J. Oberdorff, III
Alice Yurke