Actively reevaluating its supervisory approach to crypto-related activities is being pursued by the federal insurer of bank deposits, with an aim of providing a “pathway for institutions to engage in crypto- and blockchain-related activities” under safety and soundness principles, the agency’s acting board chairman said Wednesday.
In a release, Federal Deposit Insurance Corp. (FDIC) Acting Board Chairman Travis Hill said the agency is also replacing Financial Institution Letter (FIL) 16-2022. That FIL, issued April 7, 2022, required that all FDIC-insured banks and other institutions “that intend to engage in, or that are currently engaged in, any activities involving or related to crypto assets (also referred to as ‘digital assets’) should notify the FDIC.”
The 2022 letter noted that the FDIC was concerned that crypto assets and crypto-related activities “are rapidly evolving, and risks of this area are not well understood given the limited experience with these new activities.”
Now, Hill said in his release Wednesday, the FDIC “looks forward to engaging with the President’s Working Group on Digital Asset Markets established by the President’s Jan. 23, 2025 Executive Order.”
That order states the policy of the Trump administration is to “support the responsible growth and use of digital assets, blockchain technology, and related technologies across all sectors of the economy.”
Hill’s comments were accompanied by the release of 175 documents that he said show the requests from banks since the issuance of the 2022 FIL that were seeking to offer crypto-related services, along the requirements of the FIL.
“The documents that we are releasing today show that requests from these banks were almost universally met with resistance, ranging from repeated requests for further information, to multi-month periods of silence as institutions waited for responses, to directives from supervisors to pause, suspend, or refrain from expanding all crypto- or blockchain-related activity,” Hill said.
“Both individually and collectively, these and other actions sent the message to banks that it would be extraordinarily difficult—if not impossible—to move forward. As a result, the vast majority of banks simply stopped trying,” Hill said.
FDIC Releases Documents Related to Supervision of Crypto-Related Activities
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