The Federal Deposit Insurance Corporation (FDIC) has issued new guidance allowing banks to oversee their engagement in Bitcoin and crypto activities without seeking prior approval. This reverses the controversial policies imposed under the Biden administration.
In a statement on March 28, FDIC said that if banks manage risk appropriately, they will be able to participate in crypto-related services such as custody and transactions. Agents also work to replace old regulations with updated cryptographic guidance.
The policy change was published in a letter from a new financial institution rescising an early rule from 2022 requiring banks to obtain FDIC clearance before processing Bitcoin and crypto assets. That has irritated the banking industry.
By removing this barrier, the FDIC will allow its supervised banks to experiment with this new ecosystem more freely. However, certain powers still depend on inter-agency coordination.
FDIC Chairman, Chairman Travis Hill, has been called “one of several steps” in laying out a new crypto-friendly approach focused on security. He said, “FDIC will turn the page of its flawed approach over the past three years.” The agency will release additional guidance to consult with the CEO’s working group on digital assets.
Major banks recently launched Bitcoin and crypto services despite unclear regulations. By providing clarity on regulations, more banks will be able to participate.
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