FDIC Crypto Warning Underlines U.S. Banking Agencies’ Arm’s-Length Policy

This year the U.S. Federal Deposit Insurance Corp. (FDIC) unveiled its 2023 Risk Review which included crypto as one of the five categories the banking regulator saw as a cause for concern. Highlighting their preparation to confirm oversight of related activities with the institutions that they are responsible for, the FDIC noted that additional statements may be put forth if and when needed. Although no new policies were put in place, this report reinforces the view from U.S. banking agencies such as the Office of the Comptroller of the Currency and the Federal Reserve – stressing that banks should keep their distance from digital assets unless cleared by their federal regulator. Following suit, last week the Federal Reserve created a new supervisory program to advise their bank holding companies in matters regarding crypto.

Nevertheless, this year marked a few difficulties in the banking industry related to crypto-friendly solutions with several banks facing that became insolvent. In fact, in what constituted one of the biggest US banking collapses of all time – Silicon Valley Bank. These developments demonstrate the FDIC’s plight to equally aid the progress and productivity of digital solutions whilst also protecting the potential risks that have surfaced in recent times.

Robert Wilson author
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