The New York State Department of Financial Services (NYDFS) has issued digital asset guidance to state-regulated banks, outlining the information that financial institutions need to submit prior to receiving approval to undertake virtual currency-related operations.
The guidance, which paves the way for banks to offer cryptocurrency services, directs banks to file a business plan with details of the planned activity, outline how such a service would affect the bank’s capital and liquidity, and notify NYDFS at least 90 days in advance.
Superintendent of the New York Department of Financial Services Adrienne Harris said in a statement that the new regulations are “critical to ensuring that consumers’ hard-earned money is protected” and that banks stay competitive.
The regulator will “make a comprehensive assessment” of the evidence given under the guidance to evaluate if a bank should be permitted to engage in a planned crypto-related activity, according to a letter delivered to regulated institutions on Thursday.
This could involve securing cryptocurrencies on behalf of clients or providing clients with exposure to particular digital assets.
As part of the business plan that banks are required to submit to NYDFS, banks should include a complete risk assessment for the service they seek to offer, as well as an estimate of the project’s expenses and a description of the applicable consumer protection measures.
The advise is effective immediately, according to the NYDFS.