Banks Protest Crypto Companies’ Claim Against Federal Reserve Payment Systems

cryptoshitcompra.com/wp-content/uploads/2021/08/Los-bancos-protestan-contra-el-reclamo-de-las-empresas-de.jpeg »alt =» Banks protest against the claim of cryptocurrency companies against the payment systems 101 of the Federal Reserve »class =» content-img »/> Source: AdobeStock / Alex

Cryptocurrency companies seek access to the United States Federal Reserve (FED) payment systems used by legacy financial institutions to move money quickly. However, in an effort to protect their privileged position in the US financial system, banks are protesting against access to cryptocurrency companies.

Some of the major cryptocurrency companies looking to gain a foothold in these payment systems include the bank focused on digital assets. Upcoming bank and cryptocurrency exchange Kraken , as reported by the Wall Street Journal.

companies say direct access to the systems would provide them with faster and cheaper ways to process their customers’ orders.

Currently, these companies must partner with traditional banks that maintain accounts with the FED and that claim that their crypto-oriented competitors benefit from relatively light regulations, in addition to lacking the internal mechanisms necessary to prevent money laundering and other activities. illegal. Banks also argue that crypto assets are not insured with the Federal Deposit Insurance Corporation. which makes using their services riskier for US customers.

Caitlin Long, CEO and founder of Avanti, has confirmed that her company recently submitted an application to become a member bank of the Federal Reserve, which could pave the way for Avanti’s direct access to payment systems.

Avanti “formally submitted to what it had already informally agreed to, that is, the same standards of regulatory capital, compliance and supervisory scrutiny that apply to traditional banks,” he said. She said, before turning around what she described as an application of double standards by traditional banks.

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“Ironically, lobbyists in the banking industry keep saying that cryptocurrencies should be held to higher standards than traditional banks. But now your banks are getting into the crypto world too, so it’s really fun to watch bank lobbyists speak up. Knots ».

Meanwhile, traditional banks are stepping up their lobbying efforts to prevent crypto-focused competitors from entering the system, as recent developments indicate.

“Questions about whether the new bylaws can have direct access to Reserve Bank accounts and services and how are ultimately fundamental questions of US payment systems policy.” She said an open letter to the Fed presented last month by the Banking Policy Institute , which represents the interests of major banks, and Independent Community Bankers of America .

“It is reasonable to expect such applicants to pose greater risks to anti-money laundering, cybersecurity and consumer protection, as well as safety and soundness,” according to the letter.

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Learn more: – Because the Fiat currency is more confusing than cryptocurrencies – Dismantling the 4 great myths about bitcoin promoted by central banks in 2021

– With Banks Turning To Bitcoin, Is It Finally Time To Expand Banks? – US Banks Offering Custody Of Cryptocurrencies Are ‘Unbelievably’ Bullish And Risky

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