The Federal Deposit Insurance Corporation (FDIC) and the Federal Reserve have withdrawn two joint statements concerning banks’ crypto-asset activities.
In its announcement, the FDIC explained that it aims to clarify that “banking organisations may engage in permissible crypto-asset activities and provide products and services to persons and firms engaged in crypto-asset related activities.”
The Federal Reserve echoed this in its own statement, asserting that the withdrawal of the crypto guidance will “ensure the board’s expectations remain aligned with evolving risks and further support innovation in the banking system.”
The withdrawn joint statements were originally issued in January and February 2023. The first statement required state member banks to notify the Federal Reserve in advance before engaging in crypto-asset activities.
The second was a supervisory letter outlining the process for state member banks to receive non-objection before participating in dollar token activities.
The FDIC described the statements as addressing “crypto-asset risks and liquidity risks to banking organisations resulting from crypto-asset market vulnerabilities.”
Both agencies also noted that the Office of the Comptroller of the Currency took similar action in March, when it reclarified crypto banking permissions.
The FDIC added: “The agencies, along with the Office of the Comptroller of the Currency, are exploring issuing additional clarity with respect to banking organisations’ crypto-asset and related activities in the coming weeks and months.”
US transformation
The US has long been a global leader in crypto innovation. However, President Donald Trump has accelerated that lead significantly in just a few months.
Trump’s crypto-friendly appointments and restructuring of key financial regulators and agencies, the country has experienced a rapid crypto transformation, one that might otherwise have taken years.
Since taking office, Trump has announced plans for a Federal Bitcoin Reserve, disbanded the Department of Justice’s crypto enforcement division and become the first president to sign a formal crypto bill into law, among several other actions.
These moves are largely seen as efforts to ease crypto regulations. Critics, particularly from the Democratic Party, have described the changes as rushed and pointed out that many of Trump’s actions have reversed protections they had previously put in place.
The latest step, regulatory agencies rescinding past statements, signals that the country is moving into a new phase, as mainstream banks begin to embrace digital currencies.
Many traditional financial institutions had claimed they needed clearer laws and regulations before engaging with crypto. This latest shift appears to be providing just that, though, of course, it could always be argued that the guidance was there for a reason.
