The FDIC wants US banks to report current and proposed crypto-related activities

The Federal Deposit Insurance Corporation, the U.S. government agency that insures depositors at U.S. commercial and savings banks, issued a financial institutions letter Thursday. The letter urges the institutions supervised by the agency to notify the relevant regional director of their crypto-related asset activities or their intentions to engage in crypto-related activities.

According to the letter, “without considering each crypto-related activity individually, it is difficult for both institutions and the FDIC to adequately assess the implications for safety and soundness, financial stability, and consumer protection.”

Consequently, the FDIC wishes to receive any information it needs to “interact with the institution regarding associated risks” arising from its current or proposed crypto-related activity and “the institution regulated by the FDIC, as appropriate, as may be relevant.” to provide supervisory feedback, in a timely manner.” Institutions are encouraged to reach out to state regulators at the same time.

The notice notes that institutions “should be able to demonstrate their ability to conduct crypto-related activities in a secure and robust manner.” Descriptions of the risk considerations for the institutions, broken down into the categories of safety and soundness, financial stability and consumer protection, make up the bulk of the letter.

The FDIC partnered with the Office of the Comptroller of the Currency in a “policy sprint” last year that focused on crypto assets, and in November it released a statement on its findings in which the agencies outlined a “plan.” to provide more clarity as to whether certain crypto-asset-related activities undertaken by banking organizations are legally permissible, and expectations related to safety and soundness, consumer protection, and compliance with existing laws and regulations.”

In February, New Jersey Rep. Josh Gottheimer released a draft of his Stablecoin Innovation and Protection Act of 2022. If passed, the law would designate stablecoins issued by insured depository institutions or certain non-bank issuers as “eligible” and make the FDIC mandatory , a Qualified Stablecoin Insurance Fund.

US President Joe Biden’s executive order to ensure responsible development of digital assets listed the FDIC chairman among officials who are “encouraged to consider the extent to which investor and market protection measures can be used in their respective jurisdictions to address the risks of digital… assets to be addressed and whether additional measures are required.”