FDIC Paves Way for Banks to Engage in Crypto Without Prior Approval
The federal agency is reversing policy, allowing banks to offer crypto services without prior approval – a major shift in the US regulatory landscape.
US banks can now engage in crypto and other legitimate financial activities without prior regulatory approval, as long as they maintain appropriate risk controls, according to an announcement from the Federal Deposit Insurance Corporation (FDIC) on Friday.
The move marks a significant shift, as the FDIC officially removes a requirement from 2022 that financial institutions it oversees must provide prior notice before offering crypto-related services. Under the new guidance, banks can now custody digital assets, facilitate stablecoin trading, and launch blockchain services without prior FDIC approval.
“With this change, the FDIC is moving away from an approach that has been ineffective for the past three years,” said Acting FDIC Chairman Travis Hill. “We look forward to continuing to establish clearer rules for banks to operate safely in the cryptocurrency and blockchain space.”
The announcement follows recent actions by the Office of the Comptroller of the Currency (OCC), which earlier this month reaffirmed the right of national banks to engage in cryptocurrency services, including digital asset custody and stablecoin trading.
New Policy – A Major Shift in Crypto Regulation in the US
The FDIC’s decision marks a major shift from the Biden administration’s stance, which has been accused of stifling the growth of the cryptocurrency industry by restricting access to banking services. Internal documents released through the Freedom of Information Act (FOIA) show that the FDIC has previously pressured banks to limit their cryptocurrency-related services, a move many lawmakers have dubbed “Operation Chokepoint 2.0” — a reference to the Obama administration’s effort to cut industries like pawnbroking, payday lending, and firearms trading off the banking system.
In notice FIL-7-2025, the FDIC emphasized that “FDIC-supervised institutions may engage in cryptocurrency-related activities without prior approval from the FDIC, provided they maintain appropriate risk controls.”
The change comes after months of pressure from financial institutions and the cryptocurrency community. Industry representatives have accused bank regulators of using informal pressure tactics to undermine the blockchain industry, including warnings about reputational risks and financial safety concerns.
Rob Nichols, President and CEO of the American Bankers Association, welcomed the new policy:
"We appreciate the FDIC's new guidance, which helps banks participate in the cryptocurrency market in a safe and responsible manner. This is an important step forward to foster innovation and competition in the digital financial sector."
Pressure and concerns remain
While the new policy is welcomed by banks and the cryptocurrency community, the FDIC still emphasizes that financial institutions must carefully assess the risks associated with cryptocurrencies, including market risks, liquidity, security, and anti-money laundering requirements. The agency also recommended that banks “consult with their supervisors as appropriate” before expanding into the space.
The FDIC’s decision has also sparked mixed reactions in the financial world. Some experts worry that the loosening of regulations could create greater risks in the banking system.
Justin Rosario, host of the political podcast “The Opinionated Ogre,” warned:
“If Wall Street crashes again because of cryptocurrencies, we may remember the Great Recession as the good old days.”
However, proponents of the new policy argue that clearer regulations will help increase transparency and encourage legitimate capital to flow into the cryptocurrency market. With this adjustment, banks can now officially offer blockchain-related products and services, instead of having to rely on outside solutions or avoid strict oversight.
Impact on the Finance and Crypto Industry
The FDIC’s shift in stance could spur the growth of the digital asset market in the United States, as mainstream banks begin to reassess their approach to cryptocurrencies. Major financial institutions can now work directly with blockchain companies without fear of regulatory restrictions.
While there is still debate about the risks and long-term implications of this decision, the FDIC’s move marks a major shift in how