FDIC Announces Banks No Longer Need Approval to Engage in Crypto-Related Activities

The Federal Deposit Insurance Corporation (FDIC) announced Friday that banks no longer need prior approval to engage in crypto-related activities.

The Federal Deposit Insurance Corporation (FDIC) has announced that banks will no longer require prior approval to engage in cryptocurrency-related activities. This adjustment to the agency’s policy permits banks to work with digital currencies while still keeping some oversight.

The change, announced Friday, cancels a 2022 rule that forced banks to get permission before dealing with cryptocurrencies or blockchain technology.

The old restrictions had been criticized by banking groups and crypto supporters. They argued that regulators were attempting to block legitimate blockchain innovation through paperwork barriers. A lawsuit by Coinbase recently showed letters where the FDIC discouraged banks from working with crypto.

The agency is now returning to a policy that requires banks to notify the FDIC about crypto activities and show they can manage risks related to consumer protection and financial stability.

“FDIC-supervised institutions may engage in permissible activities, including activities involving new and emerging technologies such as cryptoassets and digital assets, provided that they adequately manage the associated risks,” the agency said.

“With today’s action, the FDIC is turning the page on the flawed approach of the past three years,” said FDIC Acting Chairman Travis Hill.

Banks may now handle cryptocurrency custody, manage stablecoin reserves, and participate in blockchain payment systems without pre-approval.

This adjustment to the agency’s policy permits banks to work with digital currencies while still keeping some oversight.

“The institutions may engage in permissible activities, including activities involving new and emerging technologies such as cryptoassets and digital assets, provided that they adequately manage the associated risks,” the agency said Friday.

The institutions will still be subject to supervision and must follow safety standards, anti-money laundering laws, and consumer protection rules when working with digital assets.

This change follows a similar move by the Office of the Comptroller of the Currency earlier this month. Both changes reflect the Trump administration’s more friendly approach to crypto.

David Sacks, White House AI and Crypto Advisor, said the OCC’s decision is “a big win for crypto.”

“It removes reputational risk, a subjective and meaningless factor, from how banks are supervised,” Sacks added.

The FDIC is also working with other regulatory agencies to update outdated guidance.

“This policy change is one of several steps the FDIC will take to provide clarity and support to institutions engaging with blockchain and crypto technologies,” said Acting Chairman Hill.