Risk and compliance specialist Wolters Kluwer has launched a risk assessment product aimed at banks exploring the growing market for cryptocurrencies and other digital assets.
The company has partnered with New York-based NYDIG, which aims to provide institutional solutions for bitcoin investment, to provide regulatory assessments and enhance compliance for financial institutions looking to offer their customers access to the cryptocurrency.
NYDIG research published last year found that almost three quarters of Bitcoin holders would switch to a bank offering digital currency products alongside traditional services.
As banks increasingly explore crypto-asset services, navigating the evolving risk and compliance landscape is becoming more important. Regulators around the world have been exploring how to effectively oversee firms operating in this area and protect investors.
The Financial Stability Board (FSB) recently published a report warning of the risks surrounding crypto-assets to financial stability, and the Federal Reserve Board, OCC, and FDIC also announced a series of interagency “policy sprints” focused on crypto assets.
The agencies recognize the importance of providing a collaborative approach to compliance, regulation, and consumer protection as banks begin to work with digital currencies.
“Recent federal regulatory messaging and guidance has emphasized that financial institutions pursuing bitcoin-related investments for their customers must fully understand and control for potential risks,” explained Stevie Conlon, vice president and tax and regulatory counsel for Wolters Kluwer Compliance Solutions.
“A targeted assessment allows a financial institution to appropriately tailor and document its controls.”
Patrick Sells, NYDIG’s chief innovation officer, added: “With Wolters Kluwer’s expertise and NYDIG’s best-in-class platform, banks can confidently provide the bitcoin products clients want in a safe and compliant manner.”
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