The Federal Deposit Insurance Corporation (FDIC) has rescinded its 2022 policy requiring banks to obtain prior approval for engaging in crypto-related activities.
Background of 2022 Policy
The original 2022 guidance was issued during the Biden administration and warned banks against entering the crypto space without notifying regulators. However, the lack of clear rules left many traditional institutions sidelined from the crypto sector.
New Opportunities for Banks
Under the new policy, banks are still expected to evaluate and manage risks like market volatility, cybersecurity, and money laundering. However, they no longer need pre-approval to offer services such as stablecoin reserves and crypto custody.
Market Leaders' Reactions
Crypto exchanges are already responding to the changes. Coinbase launched 24/7 Bitcoin and Ether futures recently and is in talks to acquire Deribit, while Kraken expands its derivatives offerings by acquiring NinjaTrader.
The FDIC’s policy shift represents a major step forward in increasing banks' participation in the crypto economy, potentially spurring significant institutional investor interest.
