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Under the Fed’s Tiered System, Requests for Master Account Access by Cryptocurrency Companies Will Be Subject to the Strictest Scrutiny

August 22, 2022

Via: JD Supra
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On August 15, the Federal Reserve Board (Fed) issued final guidelines, outlining the tiered approach it will use when evaluating the growing requests from fintech firms and cryptocurrency companies for access to master accounts. The guidelines make clear that while requests from institutions with federal deposit insurance will be subject to a streamlined review, institutions that engage in novel activities, such as cryptocurrency, will undergo a far more extensive one. More subtle but perhaps most important, the Fed did not change the basic requirement that an applicant has to be a “depository institution” as defined in 12 U.S.C. Section 461 to be considered an eligible institution, which effectively limits these accounts to insured or uninsured banks, credit unions, or similar institutions.

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