- The FDIC has eliminated its previous approval system which enables banks to participate in crypto activities without compromising their risk controls.
- FDIC Acting Chairman Travis Hill announced that this updated policy seeks to modernize financial regulations for banks while allowing them to deal with cryptocurrency operations.
- The updated policy aligns with recent OCC guidance, delivering a unified regulatory framework for financial institutions that offer digital asset services.
The FDIC updated its guidance on digital asset operations, allowing banks to conduct crypto activities without prior regulatory clearance. The revised policy replaces earlier notification rules and requires robust risk management measures to maintain banking stability. Financial institutions must now integrate digital asset services within a clear regulatory framework that upholds established safety standards.
New FDIC Guidance on Crypto Operations
FDIC Acting Chairman Travis Hill confirmed that supervised institutions may now engage in crypto operations without prior approval. The updated policy appears in Financial Institution Letter FIL-7-2025, which rescinds the previous requirement outlined in FIL-16-2022.
Hill stated, “With today’s action, the FDIC is turning the page on the flawed approach of the past three years.” This statement reflects the agency’s decision to update its policies in line with current market practices.
Banks are required to maintain robust internal controls while implementing crypto services. Institutions must follow applicable laws and ensure that risk management protocols meet established safety standards. This guidance provides a clear framework for integrating digital assets into traditional banking operations.
Simplified Compliance Process
The revised policy eliminates the need for advance notification of crypto-related activities. Banks can now initiate digital asset operations once they demonstrate effective risk management.
Institutions must still adhere to all relevant regulatory requirements. They are responsible for updating internal procedures to comply with the new guidance. The removal of the prior approval process simplifies compliance and reduces administrative burdens.
Hill added, “I expect this to be one of several steps the FDIC will take to lay out a new approach for how banks can engage in crypto- and blockchain-related activities in accordance with safety and soundness standards.” This comment outlines the agency’s future plans for regulatory adjustments in the crypto sector.
The financial sector is expected to check and upgrade their systems controlling risk. Financial institutions must verify that their crypto operations comply with regulations that exist in their framework. The simplified process allows banks to adopt digital asset services promptly while maintaining operational security.
Coordinated Regulatory Framework
This update follows similar clarifications made by the Office of the Comptroller of the Currency regarding crypto-asset custody and related activities. Coordinated actions among regulators create consistency across the financial sector.
The FDIC, together with the OCC, has established policies that support banks in managing digital assets properly through responsible interactions. Participation in crypto activity by banks became possible through an improved regulatory system.
Banks need to follow guidance issued by the FDIC along with other agencies during the implementation of new regulations. The review process of internal controls at institutions must run continuously to prompt required procedure updates.
The coordinated framework establishes clear expectations for risk management in digital asset operations. This environment supports banks in aligning innovative practices with traditional banking standards while maintaining safety and soundness.
The revised FDIC policy offers banks a streamlined process for adopting crypto services under strict regulatory standards. Institutions now have a clear pathway to integrate digital asset operations into their existing portfolios.
