The Federal Reserve and FDIC today rescinded two joint statements issued under the Biden administration on the risk management obligations of financial institutions should they offer crypto-related services. The move was the latest by Trump administration officials to roll back regulatory roadblocks for banks that wish to engage with digital assets.
The first statement was issued in January 2023, not long after the collapse of cryptocurrency exchange FTX, and highlighted several key risks posed by cryptoassets that banks should consider if they wish to offer crypto-related services. That was followed by a second statement in February 2023 that reminded financial institutions of their risk management obligations should they offer depository services for cryptoassets.
The Fed and FDIC said today that those earlier statements are now withdrawn. “This action is intended to provide clarity that banking organizations may engage in permissible cryptoasset activities and provide products and services to persons and firms engaged in cryptoasset-related activities, consistent with safety and soundness and applicable laws and regulations,” the FDIC said in its statement.
The FDIC added that along with the Office of the Comptroller of the Currency, the banking agencies are exploring “issuing additional clarity with respect to banking organizations’ cryptoasset and related activities in the coming weeks and months.”
The decision follows the FDIC’s announcement in March that it had rescinded earlier guidance urging banks to first contact the agency before engaging in crypto-related activities. Also in March, the OCC rescinded its policy on bank engagement with cryptocurrency and removed reputational risk as a component of bank examination and supervision.
In a statement, American Bankers Association President and CEO Rob Nichols said the association has long believed that banking regulators should avoid implementing rules or guidance that limit banks’ ability to offer digital asset products and services in a safe and sound manner.
“Today’s announcement from the Fed and FDIC is a welcome and important step toward achieving that goal and ensuring consumers can access these products and services through their trusted bank relationships,” Nichols said. “We look forward to working with the Fed and FDIC in this fast-evolving marketplace.”
