FDIC Clears Path for Bank Crypto Activities Without Prior Approval

Banks can engage in cryptocurrency and other legally permitted activities without seeking prior regulatory approval, so long as they manage risks appropriately, The Federal Deposit Insurance Corporation announced Friday.

The policy change rescinds a 2022 requirement that mandated FDIC-supervised institutions notify the agency before engaging in crypto-related activities. Under the new guidance, banks can offer services involving digital assets without the agency’s advance permission.

“With today’s action, the FDIC is turning the page on the flawed approach of the past three years,” FDIC Acting Chairman Travis Hill said in a statement. “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.”

The move aligns with similar actions by the Office of the Comptroller of the Currency, which earlier this month reaffirmed that national banks can engage in certain crypto activities, including custody services and stablecoin transactions.

This regulatory shift marks a stark departure from the Biden administration’s approach to cryptocurrency and banking relationships. Documents released earlier this year through Freedom of Information Act requests showed the FDIC frequently deterred banks from offering crypto-related services, critics claimed.

The previous regulatory stance had drawn criticism from lawmakers who started investigations into what some called “Operation Chokepoint 2.0,” a reference to an Obama-era initiative that targeted certain industries including firearms dealers and payday lenders. Critics claimed the Biden administration had similarly targeted the cryptocurrency industry through banking restrictions.

In its new Financial Institution Letter (FIL-7-2025), the FDIC clarified that “FDIC-supervised institutions may engage in permissible crypto-related activities without receiving prior FDIC approval.”

The reversal follows months of pressure from cryptocurrency advocates and completes a significant pivot in federal banking policy. Industry representatives had accused regulators of using informal pressure tactics, including concerns about “reputational risk,” to discourage banks from serving cryptocurrency businesses.

American Bankers Association President and CEO Rob Nichols praised the decision. “We welcome FDIC’s new guidance allowing supervised institutions to engage in permissible crypto-related activities without receiving prior FDIC approval,” he said in an official statement. “America’s banks are actively evaluating ways to compete safely and responsibly across the financial services ecosystem, and this type of regulatory clarity is critical to enhancing innovation in the space.”

The FDIC emphasized that banks still need to consider various risks associated with crypto activities, including market and liquidity risks, operational and cybersecurity concerns, consumer protection requirements, and anti-money laundering obligations. The agency noted that institutions “should engage with their supervisory team as appropriate” when pursuing such activities.

Friday’s announcement comes as part of a broader effort by the Trump administration to remove hurdles for digital assets. Besides the OCC’s actions, the government is pushing for a crypto reserve, and taking actions to boost the local crypto ecosystem.

While cryptocurrency advocates welcomed the policy reversal, challenges remain for the industry—which, as consequence, means not everyone is excited with this regulatory shift. “Holy shit, the next Wall St. crash is going to make us long for the good ol’ days of the Great Depression,” said Justin Rosario, host of the political podcast “The Opinionated Ogre.”

Others expressed concerns about the abruptness of the change. “FDIC announces robust new requirement to engage in crypto activities: you must pinky swear,” bank advisor and expert Donald F. Billings wrote on LinkedIn.

The FDIC regulates and insures banks that hold trillions of dollars in deposits. Its new stance could potentially unlock significant capital flows into the cryptocurrency sector as banks reassess their ability to serve digital asset companies and offer crypto-related products to customers.

Edited by James Rubin