Crypto-asset-related activities may pose “novel risks” to banks and their customers, prompting the US Federal Reserve to develop additional regulations, according to Fed vice chair for supervision Michael Barr in a speech at D.C. Fintech Week on Wednesday. Crypto-related activities expose banks to new risks, according to Barr, who emphasises that banks must ensure those activities are legal and be prepared to control risks. Fraud, theft, manipulation, money laundering, and high volatility were among the risks mentioned by Barr in his speech. According to Barr, who publicly urged the United States Congress to prepare legislation on stablecoins last month, the Fed is working with other regulatory agencies to establish the regulatory framework for stablecoins.
