Federal bank regulators are warning banks to be diligent about potential runs associated with crypto-related deposits.
The Federal Reserve, Federal Deposits Insurance Corporation and the Office of the Comptroller of the Currency, in a joint statement, pressed banks to keep an eye on certain crypto-related deposits.
They pointed specifically to deposits banks hold for crypto firms’ clients and deposits used as reserves for stablecoins. Rather than introduce new risk management requirements, the statement encourages banks to apply those that are already in place.
The regulators also want banks to conduce “robust due diligence and ongoing monitoring” for crypto-related clients, including the assessment of concentration risk and ties to other entities in the crypto space.
The statement comes weeks after Silvergate Capital in La Jolla, Calif., sold securities at a loss, and turned to advances from the Federal Home Loan Bank system, to offset a large outflow of crypto-related deposits.
Silvergate was also referenced in a recent report by the FDIC’s Office of Inspector General report urging vigilance with crypto relationships.