FDIC Reverses Course, Easing Path for Banks into Cryptocurrency Services

In a major policy shift, the Federal Deposit Insurance Corporation (FDIC) has lifted its prior approval requirement for U.S. banks engaging in cryptocurrency-related activities. The decision, announced on March 28, 2025, overturns a 2022 directive that required banks to seek FDIC consent before offering services like crypto custody, trading, or partnerships with digital asset firms. Acting FDIC Chairman Travis Hill acknowledged that the previous policy created unnecessary bureaucratic obstacles, slowing down banks’ ability to participate in the evolving digital asset space.

This move comes amid broader efforts by the Trump administration to create a more crypto-friendly regulatory environment. In January 2025, President Donald Trump issued an executive order establishing a working group to oversee digital asset markets. Notably, this group excluded both the Federal Reserve and the FDIC, signaling a shift away from previous regulatory caution and toward a more open approach to cryptocurrency adoption. Industry experts see this as part of a larger strategy to position the U.S. as a leader in the digital asset sector, especially as international markets continue to develop their own regulatory frameworks.

The FDIC’s reversal is expected to encourage more banks to explore cryptocurrency services, including tokenized deposits, custody solutions, and partnerships with blockchain-based financial firms. Major institutions such as JPMorgan and Goldman Sachs have already been making moves in the digital asset space, and this regulatory shift could accelerate their involvement. Smaller banks and fintech companies may also benefit from reduced compliance hurdles, allowing them to integrate digital asset services more efficiently. However, regulators and financial watchdogs continue to stress the importance of risk management, particularly given past incidents where crypto-related banking ventures led to liquidity crises and failures.

While banks are now free to engage with digital assets without direct FDIC approval, they must still adhere to broader regulatory guidelines governing risk, compliance, and consumer protection. The FDIC has emphasized that financial institutions must take necessary precautions to ensure the security of customer funds and the stability of the financial system. As the crypto industry evolves, the impact of this policy shift will be closely monitored, particularly in how it shapes the future of mainstream banking’s relationship with digital assets.