The Federal Deposit Insurance Corporation is a United States government corporation that protects depositors at U.S. savings and commercial banks. A letter was sent to financial institutions on Thursday. The agency requested that institutions under its supervision notify the appropriate regional director about any activities or intentions to engage with crypto-related assets.
The letter stated that it is difficult for institutions as well as FDIC to accurately assess the safety and soundness of financial stability and consumer protection implications, without taking into account each crypto-related activity individually.
The FDIC would like to have all information to “engage with” the institution about the related risks arising from current or planned crypto-related activity. It also wants to provide timely supervisory feedback to FDIC-supervised institutions.
The note states that institutions should be able “to demonstrate their ability to carry out crypto-related activities safely and soundly.” It also includes descriptions of the risks facing institutions, broken down into the categories of financial stability, safety and protection and consumer protection.
In a “policy sprint,” the FDIC and the Office of the Comptroller of the Currency collaborated on crypto assets. The agencies released a statement in November on their findings. It stated that they had a plan to “provide greater clarity on whether certain activities relating to crypto-assets performed by banking organisations are legally permissible” and that there were expectations for safety, soundness, consumer protection and compliance with laws and regulations.
New Jersey Rep. Josh Gottheimer published a draft of the Stablecoin Innovation and Protection Act of 2022 in February. The legislation, if adopted, would make stablecoins issued to insured depository institutions and certain nonbank issuers “qualified” and require that the FDIC establish a Qualified Stablecoin Insurance Fund.
The Executive Order on Ensuring Responsible Digital Asset Development by Joe Biden listed the FDIC chairperson as one of the officials “encouraged” to examine the extent to which investor protection measures in their respective jurisdictions could be used to address digital asset risks and whether additional measures might be necessary.