The FDIC today rescinded earlier guidance urging banks to first contact the agency before engaging in crypto-related activities, part of a broader effort by the Trump administration to ease regulatory hurdles for digital assets.
The FDIC in 2022 issued a financial institutions letter asking banks either engaged in or planning to engage in crypto activities to contact the agency, saying the “risks of this area are not well understood given the limited experience with these new activities.” The agency today rescinded that guidance and issued a new financial institutions letter stating that FDIC-insured institutions may engage in permissible activities, including activities involving new and emerging technologies such as crypto-assets and digital assets, provided that they adequately manage the associated risks.
“As with all other activities, FDIC-supervised institutions should consider the associated risks — including, but not limited to, market and liquidity risk; operational and cybersecurity risks; consumer protection requirements; and anti-money laundering requirements — and should engage with their supervisory team as appropriate,” the letter states.
In a statement, American Bankers Association President and CEO Rob Nichols said the FDIC’s decision was “an important step that removes an obstacle that led banks to engage more cautiously in the digital asset market, which has prevented customers from obtaining innovative products and services through their trusted bank relationships.”
“America’s banks are actively evaluating ways to compete safely and responsibly across the financial services ecosystem, and this type of regulatory clarity is critical to enhancing innovation in the space,” Nichols said. “We look forward to our continued collaboration with the FDIC and the other banking agencies as they work to issue further guidance in this rapidly developing marketplace.”
The Trump administration has taken a friendlier stance on the cryptocurrency industry than under former President Biden. The Office of the Comptroller of the Currency recently announced that it is removing all mentions of reputational risk from its bank examination and supervision, and the FDIC is currently considering doing the same. Crypto industry advocates and some lawmakers have accused regulators of using reputational risk to pressure banks into denying services to crypto customers.
