FDIC Will Focus on Crypto-Asset Risks in 2022

The year 2022 will be full of regulatory activity on the crypto front. This time, FDIC (Federal Deposit Insurance Corporation) announced that the evaluation of crypto-asset risks is a priority for 2022.

FDIC Is Worried About Crypto’s Impact on the Financial System

Explaining the necessity to evaluate crypto-related risks, FDIC stated:

The rapid introduction of a variety of crypto-asset or digital asset products into the financial system could pose significant safety and soundness and financial system risks.

In this light, FDIC believes that federal banking agencies should evaluate the “extent to which banking organizations can safely engage in crypto-asset-related activities”.

Obviously, FDIC is not the only regulator that is worried about the potential impact of the fast spread of crypto-related activities. On February 15, the U.S. Senate will discuss stablecoins like Tether or USD Coin and their impact on the financial markets.

Is Regulatory Activity Good for Cryptocurrencies?

It remains to be seen whether this year’s regulatory activity will have a negative impact on cryptocurrencies. At first glance, more obstacles and more scrutiny for crypto projects will put pressure on the speed of their development.

However, increased regulatory activity signals that crypto gained sufficient adoption and is ready to find its place in the traditional financial system.

One thing is certain: traders will have to keep a close eye on the regulators’ words and actions as they may have a significant impact on crypto markets in the longer term.

I’d note that the market has become insensitive to regulatory news in recent weeks. Instead, traders focused on general risk appetite which was understandable given inflation worries and rising Treasury yields.

The leading coins, Bitcoin and Ethereum, gained plenty of ground in recent days, and crypto markets are trying to establish an upside trend after the strong pullback. Most likely, leading cryptocurrencies will remain immune to regulatory news in the upcoming days as traders focus on the potential continuation of the current rebound.