FDIC Rescinds Crypto Banking Guidance

The Federal Deposit Insurance Corporation (FDIC) announced that banks no longer need prior approval to engage in cryptocurrency-related activities, such as holding digital assets or partnering with crypto companies. This marks a significant policy reversal from the cautionary stance adopted two years ago under the Trump administration. FDIC acting chairman, Travis Hill, emphasized the shift away from the previous, flawed approach.

This change comes after a joint warning issued in January 2023 by the Fed, FDIC, and the Office of the Comptroller of the Currency (OCC) following the crash of the Terra stablecoin and FTX's downfall.

The OCC was the first to revise guidelines allowing banks to partake in common crypto activities without prior approval. Legal actions by Coinbase revealed FDIC's updated policy, which now requires institutions to manage associated risks adequately while engaging in digital asset activities.