In regards to a report from the American Bankers Association, it has been found out that American Banks have been partnering up with multiple cryptocurrency firms because of the rapid increase of client interest and activity in cryptocurrency.
The report consists of 20 pages, which includes a thorough analysis of the crypto sector and highlights the important aspects of the crypto industry. The report is divided into four different sections, all related to the crypto industry that includes, Cryptocurrencies in General, CBDCs, NFTs, and Stablecoins. Additionally, some information about decentralized finance was also mentioned.
It also connects all the cryptocurrency involvement with products and services from banks, briefing crypto uses cases in the banking industry, keeping regulations and other issues in mind. Use cases and respective regulations included Payments, Lending, Insurance, Trading, Asset Management, and a few others.
Regulations and Issues
Also focusing on the regulatory side of crypto, the report highlighted the requirements that are connected to the purchasing and selling of crypto-based products, tax information reports, and money distribution. It mentioned that the SEC had played a big role in the regulation of cryptocurrency transactions. As for money transfer, FinCEN is responsible for regulations, as they force any operators to complete registration on the Money Service Business and Money Transmission license. And as for tax information reporting, the IRS is responsible.
But despite all this, cryptocurrency regulations have not shown any power yet. The report suggests that if regulations are not clear to the world, then it might cause confusion in the requirements. DeFi and other issues were deemed as being risky in the crypto industry.
Banks and Crypto
Banks have shown a lot of interest in adopting cryptocurrency. Their main goal is to find out about the advantages and opportunities such digital assets can bring that will make their users and clients happy and supportive. Banks have no choice but to find out tactics to bring crypto to their clients because of the extreme growth in interest rates. A survey from NYDIG showed results that nearly 80% of Bitcoin holders would be willing to store their precious assets in Banks. For banks to move along the technological enhancements, they must partner up with cryptocurrency firms to bring the best for their clients. The report also mentioned how banks could successfully join hands with crypto firms.