Recent changes by the FDIC and CFTC open new avenues for banks and crypto firms to engage more actively in cryptocurrency operations.
FDIC announces changes
On March 28, the Federal Deposit Insurance Corporation (FDIC) announced that institutions under its oversight, including banks, can now engage in crypto-related activities without prior approval. This announcement rescinds a previous mandate under Joe Biden's administration for institutions to notify the agency before such activities. The FDIC clarified that crypto-related activities include acting as crypto-asset custodians, maintaining stablecoin reserves, issuing crypto and other digital assets, participating in blockchain and distributed ledger-based settlement or payment systems, and related activities such as lending.
Lowering regulatory barriers for derivatives
The Commodity Futures Trading Commission (CFTC) also announced significant changes. On March 28, it withdrew a staff advisory letter to ensure that digital asset derivatives are not treated differently from other derivatives. This change follows efforts by Donald Trump's administration to support the US crypto sector.
Changes in the US crypto sector
Crypto firms are adjusting their strategies in response to the eased regulation. On March 10, Coinbase announced the offer of 24/7 Bitcoin and Ether futures and is planning to acquire the derivatives platform Derebit. Kraken is also expanding its derivatives market footprint by acquiring NinjaTrader, which will allow it to offer crypto futures and derivatives in the US.
These changes in regulatory policy create a more favorable environment for banks and crypto firms to interact with digital assets, potentially boosting the growth of the crypto sector in the US.
