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Federal Reserve Board rejects Custodia’s request for crypto bank supervision

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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…

Federal Reserve Board rejects Custodias request for crypto bank supervision

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

Interpretation of the news:


In recent news, the Federal Reserve Board of the United States has announced the rejection of Custodia’s request for the supervision of the Federal Reserve, marking the second time the application was turned down. Custodia, a crypto bank, applied last month for the oversight of the Federal Reserve, but it was rejected at the time.

According to a press release, the Board of Directors of the Federal Reserve voted against reconsidering Custodia’s application. This particular rejection might raise concerns on the regulations of crypto banking in the industry. Crypto banks are relatively new, and there are still question marks on how they should be regulated.

The rejection by the Board of Directors of the Federal Reserve raises questions about the challenges crypto banks face in obtaining regulatory approval. While cryptocurrency has been around for over a decade, crypto banks have only recently emerged to serve as intermediaries between traditional finance and cryptocurrencies. As such, they exist in a regulatory grey area that lacks a clear standard for supervision.

Custodia’s failed application for Federal Reserve supervision may be setting a precedent for the future of crypto bank regulation. This could result in other crypto banks having to apply multiple times, potentially leading to a bureaucratic hindrance. Additionally, this may lead to crypto banks being forced to find alternative solutions to satisfy regulatory requirements.

It is important to note that this is not necessarily a negative outcome for Custodia as a company. It can continue to operate, though with limited oversight. Still, the rejection of its regulatory application may impact its ability to attract customers concerned about its level of regulation.

In conclusion, the Federal Reserve Board’s rejection of Custodia’s request for supervision could set a precedent for other crypto banks seeking regulatory approval. The move highlights the complex regulatory landscape that crypto banks must navigate, underscoring the need for clearer regulatory guidance in the industry.

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