FDIC: Cryptocurrency Activity Poses Risk to U.S. Banking System

Odaily Planet Daily News The U.S. Federal Deposit Insurance Corporation (FDIC) stated in its 2023 annual risk review that "encrypted asset-related activities may pose novel and complex risks to the U.S. banking system that are difficult to fully assess," the report stated. Some key risks include fraud, legal ambiguity, misleading or inaccurate statements or disclosures, immature risk management practices and platform vulnerabilities. Interconnections within the crypto-asset industry could also create contagion risks for banks with greater exposure, the FDIC said. Notably, the review highlights the potential for deposit outflows from banks holding stablecoin reserves due to the risk of stablecoin runs. The FDIC joins other banking regulators in recommending further monitoring and guidance to address these cryptoasset risks. (the block)