FDIC Clears the Way for Banks to Engage in Crypto Activities, No Prior Approval Required!

The post FDIC Clears the Way for Banks to Engage in Crypto Activities, No Prior Approval Required! appeared first on Coinpedia Fintech News

The FDIC has officially dropped its 2022 rule that forced banks to get prior approval before engaging in crypto activities.This move opens the door for financial institutions to explore the digital asset space without waiting for approvals that never arrived.

The FDIC, which oversees many small banks and protects the banking system, played a big role in the crypto debanking issue. A lawsuit with Coinbase showed the FDIC told banks to avoid crypto deals while creating new rules, but never actually set any.

FDIC’s move comes after President Trump appointed crypto-friendly leaders and urged his administration to support the industry. FDIC Acting Chairman Travis Hill stated that the new guidance marks a shift away from the previous, ‘flawed approach’ which the FDIC had taken over the last three years.

“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,” he noted.

Bo Hines, head of the White House’s digital assets advisory council, praised the FDIC’s move as a “huge step forward” in a social media post. Previously, the FDIC, Federal Reserve, and OCC all required banks to get pre-approval before engaging in crypto activities. 

The Office of the Comptroller of the Currency (OCC) recently reversed its 2022 guidance, which had been issued during a time when the digital asset industry was facing significant issues like failures of major companies and high-profile fraud cases, including the downfall of the global crypto exchange FTX. This move signals a shift in how regulators view the digital assets sector.