US Fed clarifies process for banks to transact in stablecoins

(Reuters) – State banks that are a member of the U.S. Federal Reserve system should obtain a written supervisory nonobjection from the Fed before issuing, holding or transacting in dollar tokens used to facilitate payments, such as stablecoins, the central bank said in a new supervisory letter on Tuesday.

The Fed also said it is creating a new supervisory program to oversee the activities of the banks it supervises related to cryptocurrency, blockchain technology and tech-driven nonbank partnerships, with the aim of complementing its existing supervisory process and strengthening the oversight of tech-driven activities.