FDIC drops pre-approval for banks’ crypto activities

Banks no longer need pre-approval from the Federal Deposit Insurance Corp. to engage in crypto-related activities, the latest move under the Trump administration to integrate digital assets into traditional finance.

While the rescinded Biden administration-era guidance had required financial institutions interested in engaging with crypto to notify the agency and provide documentation prior to authorization, the new guidance — in the form of a Financial Institution Letter — allows banks to engage with digital assets on their own and manage the risks themselves. 

“This FIL affirms that FDIC-supervised institutions may engage in permissible activities, including activities involving new and emerging technologies such as crypto-assets and digital assets,” the agency said in a release Friday. “Institutions may engage in permissible crypto-related activities without receiving prior FDIC approval [and] should consider the associated risks — including, but not limited to, market and liquidity risk; operational and cybersecurity risks; consumer protection requirements; and anti-money laundering requirements — and should engage with their supervisory team as appropriate.”

The policy change is part of the Trump administration’s broader deregulatory efforts. In January, President Donald Trump issued an executive order titled “Strengthening American Leadership in Digital Financial Technology,” which established a working group to develop a federal regulatory framework for digital assets and directed certain agencies to identify and modify regulations affecting the sector. ​

The FDIC was not explicitly directed to modify its regulations in the January order, but the president and his appointee acting Chairman Travis Hill have signaled a willingness to loosen the reins on banks who want to transact with digital assets. 

The Office of the Comptroller of the Currency earlier this month similarly allowed national banks and federal savings associations to engage in certain cryptocurrency activities without prior approval. 

Banking industry representative Rob Nichols, the president of the American Bankers Association, said the group welcomed the updated guidance. 

“This important step removes an obstacle that led banks to engage more cautiously in the digital asset market, which has prevented customers from obtaining innovative products and services through their trusted bank relationships,” he wrote in a statement following the FDIC’s announcement. “America’s banks are actively evaluating ways to compete safely and responsibly across the financial services ecosystem, and this type of regulatory clarity is critical to enhancing innovation in the space.” 

The policy shift also comes as Congress is actively working on crypto legislation, with key bills working their way through the House Financial Services Committee.

The committee is poised to vote on two crypto-related bills this week, one on regulating payment stablecoins and the other to bar the Federal Reserve from issuing a central bank digital currency. 

Policy experts expect the stablecoin measure to pass, setting the legislation up for a full House vote this spring and a final version potentially becoming law by summer. House Majority Whip Tom Emmer, R-Minn., committed in March to advancing stablecoin and crypto market structure legislation by the August recess, following Trump’s push for regulatory clarity at a recent White House crypto summit.