1. SipPop GamesHome
  2. NFT Newsflash

Custodia Cryptobank Rejected by US Federal Reserve Board Again

• NFT Newsflash • 145 views

It is reported that the Federal Reserve Board of the United States recently announced that after rejecting the application last month, it again rejected the ap…

Custodia Cryptobank Rejected by US Federal Reserve Board Again

It is reported that the Federal Reserve Board of the United States recently announced that after rejecting the application last month, it again rejected the application of Custodia, a cryptobank, for the supervision of the Federal Reserve. A press release said that the Board of Directors of the Federal Reserve voted against reconsidering Customia’s application.

Cryptobank Custodia’s application for Federal Reserve supervision was rejected again

Interpret the above information:


The recent announcement from the Federal Reserve Board of the United States regarding the rejection of Custodia’s application for supervision is a significant development for the financial industry. Custodia, a cryptobank, had applied for the Federal Reserve’s approval to function as a regulated financial institution. However, the Board of Directors of the Federal Reserve has refused to reconsider their decision after rejecting Custodia’s application last month.

The Federal Reserve Board is responsible for regulating banks and other financial institutions in the United States. Its primary role is to ensure that the country’s monetary policy operates effectively and stably. Cryptobanks like Custodia provide banking services to clients who trade in cryptocurrency. Hence, the rejection of Custodia’s application is a clear indication that the United States Federal Reserve Board doesn’t consider cryptocurrencies or cryptobanks as stable entities.

The rejection of Custodia’s application highlights the significant regulatory hurdles that cryptobanks face in becoming mainstream financial institutions that can offer banking services such as loans, mortgages, and savings accounts, among others. Cryptocurrencies are subject to price volatility and are relatively new. This makes regulators wary of the risks they pose to the financial system.

Moreover, custodial banks are essential in the finance industry because they hold and safe keep a client’s assets such as securities, cash, and other investments. Hence, the Federal Reserve Board’s insistence on having a traditional regulatory framework for such institutions ensures that client’s assets remain secure.

In conclusion, the Federal Reserve Board’s recent announcement regarding Custodia’s application for supervision is likely to have a significant impact on the development of cryptobanks and cryptocurrencies in the United States. The regulatory landscape is still unclear, and custodial banks that exclusively focus on digital assets will have to work hard to meet the regulatory requirements demanded by regulators. It remains to be seen how the industry will evolve in the future, but it is clear that Federal Reserve Board’s regulatory oversight will remain a critical aspect of the industry.

This article and pictures are from the Internet and do not represent SipPop's position. If you infringe, please contact us to delete:https://www.sippop.com/2873.htm

It is strongly recommended that you study, review, analyze and verify the content independently, use the relevant data and content carefully, and bear all risks arising therefrom.

Like (0)
Previous 02/23/2023 23:59
Next 02/24/2023 00:17

Related recommendations