Federal bank regulatory agencies issued a joint statement on liquidity risks to banking organizations resulting from crypto-asset market vulnerabilities.

Agencies joining the Federal Reserve System (Federal Reserve) in its bank crypto warning are the Federal Deposit Insurance Corporation (FDIC) and the Office of the Comptroller of the Currency (OCC).

The statement highlighted certain sources of funding from crypto-asset-related entities may pose heightened liquidity risks to banking organizations due to the unpredictability of the scale and timing of deposit inflows and outflows. For example, deposits placed by a crypto-asset-related entity that are for the benefit of the crypto-asset-related entity’s customers (end customers), and deposits that constitute stablecoin-related reserves.

“The stability of such deposits may be linked to demand for stablecoins, the confidence of stablecoin holders in the stablecoin arrangement, and the stablecoin issuer’s reserve management practices,” the statement said.

The agencies said the statement aims to "reminds banking organizations to apply existing risk management principles", mot "create new risk management principles". Quoted as saying:

Banking organizations are neither prohibited nor discouraged from providing banking services to customers of any specific class or type, as permitted by law or regulation.