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News

FDIC Removes Pre-Approval, Allows Banks Crypto Engagement

2 mins mins
Key Points:

  • The FDIC rescinded its 2022 policy requiring pre-approval for banks’ crypto activities.
  • New guidelines allow banks more freedom to engage with digital assets.
  • Banks can become custodians for crypto assets under FDIC supervision.

fdic-rescinds-crypto-pre-approval-expands-bank-autonomy
FDIC Rescinds Crypto Pre-Approval, Expands Bank Autonomy

The Federal Deposit Insurance Corporation (FDIC) has removed the need for banks to seek pre-approval for engaging in cryptocurrency-related activities.

This regulatory shift could lead to greater institutional involvement in the cryptocurrency market.

FDIC Alters Crypto Policy, Boosts Bank Autonomy

The FDIC announced changes enabling banks to offer digital asset services without prior regulatory approval, reversing a 2022 mandate. This policy update was articulated by FDIC Acting Chairman Travis Hill, signifying a noteworthy transformation in the regulatory landscape.

“Banks can now act as crypto-asset custodians, maintain stablecoin reserves, issue digital assets, and participate in blockchain-related activities. These changes permit greater institutional engagement with cryptocurrency markets, potentially elevating institutional trust and investment,” says Travis Hill. “With today’s action, the FDIC is turning the page on the flawed approach of the past three years. I expect this to be one of several steps the FDIC will take to lay out a new approach for how banks can engage in crypto- and blockchain-related activities in accordance with safety and soundness standards.”

Market responses included recognition from industry leaders who anticipate increased crypto adoption in the financial sector. Chairman Hill stated, “With today’s action, the FDIC is turning the page on the flawed approach of the past three years.”

Historical Insights into Regulatory Changes and Market Effects

Did you know? In 2022, the FDIC required banks to notify the agency before participating in crypto-related activities, a control now reversed to encourage freedom in engaging with digital financial services.

Historically, the FDIC’s guidance aligns with increasing regulatory openness within financial sectors towards cryptocurrency. This move correlates with actions by bodies such as the Office of the Comptroller of the Currency, promoting similar views on crypto activities.

Experts suggest that institutional backing may bolster cryptocurrency stability, with potential technological integration fostering consumer confidence. This policy could elevate banks’ competitive edge globally, enhancing their role within the crypto industry.

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Avatar of John Kojo Kumi

John Kojo Kumi

29 March 2025, 01:59:28 GMT +0000

John Kojo Kumi is a cryptocurrency researcher and writer specializing in emerging startups, tokenomics, and market dynamics within the blockchain ecosystem. With years of experience in crypto journalism and blockchain research, he provides in-depth coverage of decentralized finance (DeFi), NFTs, and Web3 innovations.

He holds a Bachelor of Arts in Geography and Rural Development from Kwame Nkrumah University of Science and Technology, Kumasi, bringing a multidisciplinary perspective to the evolving digital asset space. As a Crypto News Writer, he tracks and reports on industry trends, while his role as a Registrar at the Commission on Human Rights and Administrative Justice reflects his commitment to governance and transparency.

His expertise spans content strategy, SEO optimization, and technical research, enabling him to craft insightful, data-driven analyses. Passionate about blockchain’s transformative potential, he strives to equip readers with the knowledge to navigate the complexities of digital assets and decentralized technologies.

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