/cloudfront-us-east-2.images.arcpublishing.com/reuters/4NVIFKWS7FIN5OCZDXMFJS7XYA.jpg "US Fed clarifies process for banks to transact in stablecoins")
The U.S. Federal Reserve building in Washington, D.C./File Photo
Aug 8 (Reuters) – State banks that are a member of the U.S. Federal Reserve system should obtain a written supervisory nonobjection from the Fed before issuing, holding or transacting in dollar tokens used to facilitate payments, such as stablecoins, the central bank said in a new supervisory letter Tuesday.
The Fed also said it is creating a new supervisory program to oversee the activities of the banks it supervises related to cryptocurrency, blockchain technology and tech-driven nonbank partnerships, with the aim of complementing its existing supervisory process and strengthening the oversight of tech-driven activities.
The new announcements, which were sent Tuesday to supervisory and examination staff at Federal Reserve banks and state member banks, comes just a day after payments giant PayPal (PYPL.O) announced it would launch its own stablecoin, a type of cryptocurrency typically pegged to a traditional asset, often the U.S. dollar.
Prior attempts by major mainstream companies to launch stablecoins have met fierce opposition from financial regulators and policymakers. Meta’s (META.O), then Facebook, 2019 plans to launch a stablecoin, Libra, were foiled after regulators raised fears it could upset global financial stability.
For banks to receive a written nonobjection to be able to engage with stabelcoins, banks should demonstrate appropriate risk management, including having systems in place to identify and monitor any potential risks, including cybersecurity and illicit finance threats, according to the Fed.
After receiving a written nonobjection, state member banks engaging in dollar token-related activities will continue to be subject to supervisory review as well as heightened monitoring of those activities, the Fed said.
Reporting by Hannah Lang in Washington; Editing by Chris Reese and Jonathan Oatis
Our Standards: The Thomson Reuters Trust Principles.
Dogecoin DOGE/USD and Shiba Inu SHIB/USD are trading around 3% higher in a single day boosted by the optimism in the cryptocurrency market.
Cryptocurrency
Price
Market Cap
24-Hour Trend
7-Day Trend
Dogecoin
$0.3923
$57.6 Billion
+2.8%
+5.3%
Shiba Inu
$0.00002496
$14.7 Billion
+4.2%
+3.1%
Trader Notes: Analysts see bullish potential for the top two meme coins.
Crypto chart analyst Ali Martinez predicts a potential rally for Shiba Inu, suggesting SHIB could hit $0.00049 if it mirrors DOGE’s pattern.
Trader Javon Marks highlights SHIB’s daily chart with a possible bull pattern confirmation. A breakout target of $0.000081—216% above current levels—could see SHIB surge more than 200%.
For Dogecoin, Altcoin Sherpa notes the recent correction as not bearish, seeing opportunities for buyers with another leg up expected soon.
Crypto Amsterdam observes DOGE hovering in a mid-range phase, suggesting $1 could be on the horizon.
Meanwhile, trader Kevin forecasts a DOGE breakout by Saturday.
Statistics: IntoTheBlock Data shows:
Shibarium Activity: Daily transactions climbed from 4.66 million on Nov. 20 to 4.75 million on Nov. 21.
Read Next:
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World’s popular digital currency rises as high as $99,073 on expectations Trump will ease legal and regulatory hurdles.
Bitcoin is nearing the $100,000 mark as crypto enthusiasts bet that United States President-elect Donald Trump will usher in a more welcoming regulatory environment for digital assets.
The world’s most popular digital currency rose as high as $99,073 on Thursday, extending its surge since Trump’s re-election on November 5.
The commodity has risen more than 60 percent since election day as investors anticipate Trump’s incoming administration to ease regulatory and legal hurdles to its use.
Trump, who called the asset a “scam” during his first term, accepted campaign donations in cryptocurrency, and has pledged to make the US “the crypto capital of the planet” and accumulate a national bitcoin reserve.
Trump and his three sons in September also announced the launch of their own crypto business, World Liberty Financial, which investors have taken as a promising sign of the president-elect’s belief in the sector.
In another bullish signal for the sector on Thursday, United States Securities and Exchange Commission (SEC) chair, Gary Gensler, who was widely disliked among crypto investors for his aggressive enforcement actions targeting the sector, confirmed that he would step down in January.
Trump had pledged to fire Gensler on “day one” of his administration, though the president does not have the authority to remove the SEC chair before the end of his or her term.
While viewed by supporters as a ticket to big returns and financial freedom, Bitcoin and other cryptocurrencies are known for their volatility and have faced government crackdowns in several parts of the world.
After climbing to a record high of $69,000 in late 2021, Bitcoin plunged to less than $16,000 over the following year.
The commodity burst past its previous peak in March after gaining more than 300 percent since November 2022.
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