Banks have been intimated about risks to security through crypto by the U.S Financial Regulators. The authorities have also expressed concerns over some crypto trends, such as their volatility and susceptibility to stable coins.
The regulators have clarified that banks are not under any legal restraints to offer services to crypto customers.
The joint statement was issued by:
FDIC (Federal Deposit Insurance Corporation)
OCC (Office of the Comptroller of Currency), and
Board of Governors (Federal Reserve)
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The statement was based on critical risks associated with cryptocurrency and participants in the sector.
There has recently been a surge in cyber threats in the crypto sector.
“The main thing halting the future of crypto in 2023 is the regulatory uncertainty and security concerns surrounding it. The industry must address the issues leading to frequent hacks and data breaches. Upgrading the Cryptocurrency Security Standard (CCSS) to offer a similar level of protection as the Payment Card Industry Data Security Standard (PCI DSS) should be priority number one. The CCSS should offer the same level of comprehensive cover for those trading and transacting with crypto as the PCI DSS does for people making card payments.,” says Daniel Mcloughlin, field CTO, OneSpan.
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Additionally, the agencies recommended banking institutions create proper risk management plans for cryptocurrencies.