Ovunc Kutlu
23 February 2023•Update: 23 February 2023
ISTANBUL
The US Federal Reserve and banking regulators warned banking organizations Thursday about liquidity risks associated with crypto-asset-related entities.
The agencies said the stability of the crypto-asset-related entities' deposits may be influenced by periods of stress, market volatility and related vulnerabilities in the cryptocurrency sector.
The Fed, joined by the US Federal Deposit Insurance Corporation and the Office of the Comptroller of the Currency, underlined the importance of "the unpredictability of the scale and timing" of deposit inflows and outflows in crypto-asset-related entities.
"Such deposits can be susceptible to large and rapid inflows as well as outflows, when end customers react to crypto-asset-sector-related market events, media reports, and uncertainty," according to a statement.
The agencies also warned banks about stablecoins, as the stability of their deposits may be linked to their demand, confidence of holders and stablecoin issuer's reserve management.
They urged banking organizations to actively monitor the liquidity risks, establish and maintain effective risk management, noting that the banks are required to comply with applicable laws and regulations.
