Acting Chairman Travis Hill addressed the release, acknowledging past criticisms of the Federal Deposit Insurance Corporation’s stance on crypto assets and blockchain. He previously noted that the agency’s approach had created a perception that it was largely unwelcoming to institutions exploring blockchain or distributed ledger technology.
Upon assuming his role, Hill initiated a comprehensive review of the FDIC’s supervisory communications with banks looking to offer crypto-related products and services. While this review is ongoing at the time of writing, the agency has opted to release a substantial collection of documents ahead of a court-ordered deadline.
According to Hill, this decision was made to improve transparency beyond what is required under the Freedom of Information Act (FOIA) while also aligning with the intent of the FOIA request.
Earlier, the FDIC had disclosed 25 so-called ‘pause’ letters sent to 24 institutions expressing interest in crypto and blockchain activities. The latest release includes additional correspondence with those institutions as well as communications with others beyond that initial group.
These documents indicate that banks' requests to engage in such activities were often met with resistance, including prolonged requests for further information, extended periods without responses, and supervisory directives to pause or halt expansion in crypto-related operations. Hill noted that these actions collectively signalled to banks that pursuing such activities would be exceedingly difficult, leading most institutions to abandon their efforts.
Looking ahead, the FDIC is analysing its supervisory approach to crypto-related activities. This includes replacing Financial Institution Letter (FIL) 16-2022 and formulating a framework that allows banks to engage in crypto and blockchain-related activities while maintaining regulatory safety and soundness standards. The agency also intends to collaborate with the President’s Working Group on Digital Asset Markets, established by an executive order issued on 23 January 2025.
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