US Federal Reserve denies Custodia Financial institution’s request for Fed supervision

The US Federal Reserve has denied a request from cryptocurrency financial institution Custodia Financial institution to rethink its membership utility to the Federal Reserve System.

The Fed introduced its denial on Feb. 23 saying the Federal Reserve Board beforehand determined that Custodia’s utility “was inconsistent with the required components beneath the legislation.”

@federalreserve proclaims it has denied the request by Custodia Financial institution, Inc., for reconsideration of the Board’s determination final month on its utility to be supervised by the Federal Reserve: https://t.co/ZYNUEoLeN1

— Federal Reserve (@federalreserve) February 23, 2023

In January, the Fed rejected Custodia’s utility to change into a member. Board guidelines enable candidates to request a reconsideration of membership selections.

On the time of the preliminary rejection, the Fed claimed Custodia had an “inadequate” administration framework.

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It additionally cited a joint declaration it made alongside the Federal Deposit Insurance coverage Company (FDIC) and Workplace of the Comptroller of the Foreign money (OCC) that claimed cryptocurrencies had been “inconsistent with secure and sound banking practices.”

Custodia has stated it needs to hitch the Federal Reserve System so it may be regulated beneath the requirements that apply to conventional banks and open a path for different crypto-banks that want to be held to those self same heightened requirements.