All FDIC-supervised institutions that plan to engage in, or that are presently engaged in, any activities involving or related to crypto-assets are now required to inform the FDIC.
FDIC-supervised institutions are “requested to provide information described in this letter.”
The FDIC confirmed that it would be reviewing the information and offer “relevant supervisory feedback.”
A copy of the letter may be accessed via the FDIC’s website.
Statement of Applicability: The contents of, and material referenced in, this FIL “apply to all FDIC-supervised financial institutions.”
Although the FDIC claims that it supports innovations that are “safe” and “sound,” in compliance with laws and regulations, and fair to consumers, the FDIC is “concerned that crypto assets and crypto–related activities are rapidly evolving, and risks of this area are not well understood given the limited experience with these new activities.”
Crypto–related activities may “pose significant safety and soundness risks as well as financial stability concerns.”
Crypto–related activities “present risks to consumers, and insured depository institutions face risks in effectively managing the application of consumer protection laws and regulations to new and changing crypto–related activities.”
As noted in the update:
“Pursuant to Section 39 of the Federal Deposit Insurance Act (FDI Act), the FDIC has established in Part 364 (including Appendices A and B) safety and soundness standards for all FDIC–supervised institutions.”
An FDIC–supervised institution that “engages, or intends to engage in, any crypto–related activities should notify the FDIC and provide any information requested by the FDIC that will allow the agency to assess the safety and soundness, consumer protection, and financial stability implications of such activities.”
The FDIC will review “the relevant information submitted by the FDIC–supervised institution related to crypto-related activities and provide relevant supervisory feedback to the institution, as appropriate.”
As covered, the Federal Deposit Insurance Corporation (FDIC) Acting Chair Martin J. Gruenberg released on February 7, 2022 the following statement and summary of the FDIC’s priorities for the coming year:
“The FDIC’s core mission is to maintain stability and public confidence in the U.S. financial system. The FDIC carries out this mission through its responsibilities for deposit insurance, banking supervision, and the orderly resolution of failed banks, including systemically important financial institutions.”
As stated in the update:
“Banking supervision encompasses safety and soundness and consumer protection, both of which are essential to this important mission. While there are many pressing issues the FDIC will have to address this year, key priorities are: the Community Reinvestment Act; climate change; the Bank Merger Act; crypto-assets; and the Basel III capital rule. All of these priorities will require close collaboration among the federal banking agencies.”
Martin J. Gruenberg further noted that he’d like to acknowledge the extraordinary dedication of the FDIC staff who will be critical “to carrying forward the work on these priorities.”