Digital assets are becoming more common in US banking computations. One of these institutions could occasionally go bankrupt and the Federal Deposit Insurance Company (FDIC) will have to step in to clean things up.
Cue Anchorage, a digital asset hedger and the first crypto firm to receive a trust status from the Office of the Comptroller of the Currency. According to documents obtained by filing a Freedom of Information Act (FOIA) request, the bank is in the final stages of bidding for a contract with the FDIC to act as a distributor of crypto asset management and solutions.
CoinDesk's FOIA request sought all records related to the crypto custodian from the federal agency. Anchorage is the only company named in the documents, implying that no other company is competing to provide storage and disposal services for the FDIC.
Although the document indicates an award date of September XNUMX, XNUMX, an expense tracking site of a government agency seems to indicate that no contracts have been awarded in XNUMX or so far in XNUMX.
The FDIC is a federal banking regulator in the US responsible for providing deposit insurance to national banks. If one of these banks fails, the deposits of their clients of the service are protected by insurance of up to €250,000 per account.
Anchorage declined to comment on the potential contract or how it will provide this service. Decipher first reported in September that the commission was close to reaching an agreement with Anchorage for these services.
The document is signed by Anchorage Director Nathan McCauley and FDIC Contracting Officer Kervin Dupart.
Regulatory Requirements
According to the FOIA reply, the agreement would be worth €1.5 million over 3 years with an alternative to extend it for another couple of years. The agreement would see Anchorage act as a contractor for FDIC-R, the receivership arm of the FDIC, to minimize losses to the share insurance fund through the speedy realization and liquidation of the value of captive assets.
Anchorage would also be required to create for the FDIC a "Cryptographic Asset Disclosure List" that describes the assets held by a corporation, their value, and any third-party use of the asset, such as use as collateral for a loan to through a smart contract.
The FDIC does not cover digital assets. People familiar with the agency's thinking told CoinDesk in October that it had begun looking into deposit insurance for stablecoins, particularly transfer insurance for stablecoin transmitters that hold their US dollar reserves in the banks.
According to the document, Anchorage will have to keep digital assets in cold storage, with private keys absolutely protected by a local or external network firewall.
Anchorage will be required to report inventory, cash receipts, inventory changes, pending settlements, "crypto assets held for others" and other information to the FDIC on a monthly basis, along with any ancillary reports requested on a case-by-case basis.
Anchorage may also be required to convert your digital assets into US dollars or return them to third parties as required.
XNUMX-XNUMX - Reactive Document written by Sam Reynolds on Scribd
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Recently, the fintech company Milo announced that it plans to offer bitcoin-backed mortgages in the near future. Now, Milo does not have FDIC insurance, although he is not required to do so since he is a non-bank entity. If this effort on Milo's part is successful, other banks and institutions will probably take notice and try his offer.
Crypto lender Ledn has reported that he is working on a related product. Another company, United Wholesale Mortgage, which is the second-largest mortgage lender in the US, began offering crypto mortgages in mid-XNUMX, but called off the initiative in October citing feeble demand.
Although US banks have slowly started to offer crypto services to their wealthiest customers after the OCC gave them the go-ahead in October XNUMX, most of the cryptocurrencies held by retail investors hold on to stocks. . Crypto lender Figure, a fledgling federal bank, recently altered its national charter petition to note that it would offer FDIC-insured accounts.
Whether these exchanges are interested in FDIC insurance remains to be seen, although many have achieved depository licenses, which include their form of insurance.
Anchorage and other digital asset banks do not carry FDIC insurance on their deposits.