FDIC to Review Rule That Could Reshape Banks’ Relationship With the Crypto Sector

The U.S. Federal Deposit Insurance Corporation (FDIC) is preparing to review a key rule that could redefine how regulated banks interact with the cryptocurrency industry. The decision marks a potential turning point in U.S. financial policy — one that could bring digital assets closer to mainstream banking.

---

Background: From Restriction to Reconsideration

Back in April 2022, the FDIC issued Financial Institution Letter 16-2022 (FIL-16-2022), which required banks under its supervision to notify the agency before engaging in any crypto-related activities.
In practice, this rule acted as a deterrent — discouraging many banks from exploring partnerships or services involving cryptocurrencies.

Now, in 2025, the FDIC has announced it will rescind that restrictive guidance and replace it with FIL-7-2025, which allows institutions to engage in certain crypto activities without prior approval, provided they implement strong risk management and compliance controls.

This move aligns with the recent trend among U.S. regulators such as the Office of the Comptroller of the Currency (OCC) and the Federal Reserve, both of which have adopted a more open stance toward digital asset innovation.

---

What the New Rule Could Mean

1. Fewer Barriers for Banks

Under the new guidance, FDIC-supervised institutions will no longer need to wait for explicit approval to participate in approved crypto-related operations.
This could accelerate the entry of traditional financial institutions into the blockchain ecosystem — including services like custody, settlement, and tokenization.

1. Potential Expansion of Crypto-Bank Services

The FDIC’s new framework covers a range of activities, including:

Custody of crypto assets

Maintaining reserves for stablecoins

Issuing or managing digital tokens

Participation in blockchain or distributed ledger networks

Market-making, exchange, or redemption services

This expansion could turn conventional banks into major infrastructure providers for the crypto economy.

1. Bridging Traditional and Digital Finance

If fully implemented, the revision could strengthen the bridge between crypto companies and the traditional banking system.
Banks could offer stablecoin reserves, manage tokenized deposits, or provide credit and payment rails to blockchain firms — increasing the legitimacy and reach of the crypto sector.

---

Remaining Challenges and Risks

While the new approach offers opportunity, it also raises familiar regulatory challenges:

Market and liquidity risk: Digital assets remain volatile, and exposure must be carefully measured.

Operational and cybersecurity risk: Banks must protect systems from hacks, bugs, and blockchain vulnerabilities.

Consumer protection and compliance: Anti-money laundering (AML) and know-your-customer (KYC) standards remain critical.

Regulatory coordination: FDIC, OCC, and Federal Reserve guidance must stay consistent to prevent legal uncertainty.

As the FDIC reviews its supervision letters and communication with banks, it is expected to issue further clarification on what activities will be considered “permissible.”

---

Who Benefits

For Crypto Companies

Easier access to banking services

Stronger regulatory legitimacy

Opportunities for new partnerships with established institutions

For Banks

New revenue streams from custody, payments, and blockchain infrastructure

Increased participation in the digital asset economy

Need for investment in crypto compliance and technology

For Consumers

More secure and regulated access to crypto-related services

Integration of digital assets with traditional finance

Potentially lower transaction friction and improved trust

---

Looking Ahead

The FDIC has stated it will review and potentially replace previous interagency statements that took a more restrictive approach to crypto banking.
In July 2025, the agency, alongside the OCC and Federal Reserve, also released joint risk management guidance for banks engaged in crypto asset safekeeping, signaling a coordinated shift toward clearer standards.

If the review results in a balanced framework — promoting innovation while enforcing prudence — it could mark the beginning of a new era for U.S. financial institutions and digital assets alike.

---

Conclusion

The FDIC’s decision to review and potentially revise its crypto rule could reshape how banks interact with blockchain technology.
What once was seen as a regulatory “red light” may soon turn yellow — or even green — for innovation.

If managed wisely, this shift could accelerate the integration of crypto into the heart of traditional finance, opening the door for a new generation of hybrid financial services.