On March 28, 2025, the Federal Deposit Insurance Corporation (“FDIC”) published new guidance reversing the agency’s previous approach to cryptocurrencies and providing fresh guidance to banks interested in digital assets.
The guidance rescinds April 2022 guidance establishing a prior notification and approval requirement for institutions that wished to engage in crypto-related activities. Under the prior regime, the FDIC would “assess the safety and soundness, consumer protection, and financial stability implications of such activities” before granting approval. The new guidance allows institutions to engage in permissible activities involving cryptocurrencies provided that they adequately manage the associated risks. These activities include (i) acting as crypto-asset custodians, (ii) maintaining stablecoin reserves, (iii) issuing crypto and other digital assets, (iv) acting as market makers or exchange or redemption agents, (v) participating in blockchain- and distributed ledger-based settlement or payment systems, and (vi) related activities such as finder activities and lending.
Although FDIC-supervised institutions no longer require a green light from the FDIC to engage in these practices, institutions must still address certain risk management considerations, such as market and liquidity risk, operational and cybersecurity risks, consumer protection requirements, and anti-money laundering requirements. The FDIC is expected to issue further guidance in the coming months.
Takeaway
This is the newest in a series of actions by the new administration to remove barriers to investment in digital assets. By placing crypto on level ground with other financial instruments, the guidance provides certainty and makes it increasingly easier for institutions to enter in the crypto-services market. Of course, these institutions will still have to engage in the necessary risk management considerations, which does require experience with these assets. However, as traditional financial institutions become more familiar with digital assets, the policy posture of the new administration, along with the promise of new guidance from the FDIC, should eliminate previously-existing barriers to their use of such assets.
