Global fintech and funding innovation ecosystem

Moody’s says Crypto regulation a plus for banks, fintechs

Investment Executive | James Langton | Jul 19, 2021

US federal reserve - Moody's says Crypto regulation a plus for banks, fintechsFederal Reserve’s plans for stablecoins could bring transparency and safety to the sector

U.S. banking regulators increasing their oversight of stablecoins would be a positive for banks and fintechs, says Moody’s Investors Service.

U.S. Federal Reserve Board Chair Jerome Powell discussed stepping up regulation of stablecoins in Congressional testimony last week. Among other things, he said  the Fed intends to publish a white paper in early September about digital assets including stablecoins, central bank digital currencies (CBDCs) and others.


Stablecoins are a form of digital asset whose value is linked to an underlying asset, such as U.S. dollars, in an effort to increase their appeal as a method payment and a store of value while providing the benefits of digital assets.

The prospect of greater oversight of stablecoins would be positive for banks, Moody’s said, “because it would help to increase safety and transparency around stablecoins and may limit some of the risks to financial stability and the potential competitive threats posed by the currently unregulated stablecoin industry.”

However, Moody’s said there’s little regulation around stablecoins. Without rules on disclosure or how the reserves that are backing stablecoins can be invested, “there is no guarantee that stablecoins are indeed backed by the equivalent value in assets,” it said.

The U.S. Office of the Comptroller of the Currency (OCC) has issued guidance for banks, which allows them to hold stablecoin reserves “if they can verify that the reserves are equal to outstanding stablecoin tokens to help withstand large client outflows,” it said.  “However, crypto currency firms issuing stablecoins are not required to follow OCC guidance, and no other enforceable regulation exists,” Moody’s said.

Continue to the full article --> here

NCFA Jan 2018 resize - Moody's says Crypto regulation a plus for banks, fintechs The National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit:

Latest news - Moody's says Crypto regulation a plus for banks, fintechsFF Logo 400 v3 - Moody's says Crypto regulation a plus for banks, fintechscommunity social impact - Moody's says Crypto regulation a plus for banks, fintechs

Support NCFA by Following us on Twitter!

NCFA Sign up for our newsletter - Moody's says Crypto regulation a plus for banks, fintechs


Leave a Reply

Your email address will not be published. Required fields are marked *

2 + sixteen =