U.S. Federal Reserve Introduces a New System to Monitor Banks Crypto Activities

The U.S. Federal Reserve (the country's central bank) has started a new system to watch how banks work with cryptocurrency, like Bitcoin. On Tuesday, they said banks must ask for permission before they do certain things with digital money.

This new move doesn’t make new rules but explains how the bank will keep an eye on crypto dealings. They have a special program for this, and experts on digital money will work with regular bank checkers.

The bank also gave more details about how banks should work with a type of digital coin called stablecoins. Banks that want to use these coins for payments need to show they can do it safely and need the central bank’s approval.

Getting this approval might be hard. Each bank has to show they understand the risks, like possible hacking or money laundering. 

This information builds on what the bank said in January about crypto rules. It comes after news that PayPal will start its own digital coin.

U.S. bank checkers want to keep a clear line between regular banking and crypto but say banks can still try new things if they watch them closely. The central bank will tell banks when they will check their digital money actions.

The bank believes its new system will help make sure that new financial services can be safely introduced to the public.