TL;DR
- The FDIC now allows banks to engage in crypto activities without prior approval, eliminating the previous policy of mandatory notification.
- The change follows a similar stance adopted by the Office of the Comptroller of the Currency (OCC), promoting more flexible access to the crypto sector.
- New guidelines have been established for institutions to manage the risks of crypto activities.
The Federal Deposit Insurance Corporation (FDIC) has made a change in its approach regarding banking activities related to cryptocurrencies.
As of this announcement, financial institutions under its supervision can participate in permitted crypto activities without needing prior approval. This modification reverses the previously adopted policy, which required banks to notify the FDIC before engaging in crypto-related operations.
This adjustment comes after another banking regulator, the Office of the Comptroller of the Currency (OCC), adopted a similar stance, laying the foundation for banks to access the crypto market more flexibly. In statements by the FDIC’s interim chairman, Travis Hill, the agency acknowledged that the previous policy, implemented over the last three years, had not produced the desired results. Hill emphasized that this change aims to improve banks’ relationship with new financial technologies.
The FDIC Establishes New Guidelines for Banks
The FDIC also issued new guidelines allowing supervised institutions to engage in crypto activities, provided they appropriately manage the inherent risks. These activities include, among others, acting as crypto-asset custodians, maintaining stablecoin reserves, issuing crypto-assets, and participating in blockchain-based payment systems. Financial institutions must consider risks such as cybersecurity, market, and liquidity risks, as well as comply with consumer protection and anti-money laundering regulations.
Additionally, the FDIC assured that it would continue collaborating with other regulatory agencies to issue further guidance in the future. This includes a review of interagency documents issued in early 2023 related to cryptocurrencies, aimed at updating regulations and ensuring that institutions follow the proper guidelines to operate in the market.
The FDIC’s shift in stance shows the move towards a more flexible approach in banking regulation, aimed at facilitating the integration of cryptocurrencies into traditional financial services.
