FDIC shifts stance on digital assets and will allow financial institutions to engage in crypto activities without getting prior sign-off

The U.S. Federal Deposit Insurance Corporation is taking a new approach under the Trump administration toward digital assets and is turning back standards requiring financial institutions to notify the agency before engaging in crypto-related activities.

In a statement released on Friday, the FDIC said it would be rescinding old guidance and providing a new one to clarify that its supervised institutions can "engage in permissible crypto-related activities" without getting the agency's go-ahead beforehand.

"With today's action, the FDIC is turning the page on the flawed approach of the past three years," said FDIC Acting Chair Travis Hill in a statement on Friday. "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."

The FDIC previously warned that crypto activities could pose a risk to the U.S. banking system. In recognizing those risks, the agency released a Financial Institution Letter in April 2022, urging its supervised institutions to inform the agency about their current and intended crypto-related activities.

On Tuesday, the FDIC also looked to put an end to "reputational risk" as a way to supervise banks following criticism from some in the crypto industry who say they have been blocked from key financial services. Separately, another U.S. agency, which regulates and supervises national banks and federal savings associations, also rescinded previous digital asset restrictions earlier this month. The Office of the Comptroller of the Currency clarified that crypto-related activities are allowed in the federal banking system.

This all comes after President Donald Trump has signaled a friendlier approach to crypto than the previous Biden administration. Trump has criticized the Biden administration's approach to banks and crypto, saying on March 7 at a White House Summit that the previous administration "strong-armed banks into closing the accounts of crypto businesses and entrepreneurs, effectively blocking some money transfers to and from exchanges, and they weaponized government against the entire industry."

Bo Hines, executive director of the President's Council of Advisers for Digital Assets, said the FDIC's move was "another big win."