Michaela
The Federal Deposit Insurance Corporation (FDIC) has announced plans to revise its policies, allowing U.S. banks to manage cryptocurrency assets and offer tokenized deposits without prior regulatory approval.
During a Senate hearing, Acting FDIC Chairman Travis Hill confirmed that the agency is revising its stance on cryptocurrency. He explained that the FDIC is re-evaluating its previous policies that had discouraged banks from engaging with crypto assets.
Hill noted that financial institutions interested in entering the crypto space often faced significant delays, excessive scrutiny, and pushback from regulators. This hindered their efforts to participate in the growing sector.
According to Barron’s, once the revisions are finalized, tokenized deposits could merge checking accounts with blockchain technology, marking a key shift in banking infrastructure as it adapts to the rapidly growing digital asset sector.
Per an FDIC press release, the regulator made public 175 internal documents outlining previous interactions with banks about cryptocurrency. The release came as a result of a court order, following a lawsuit filed by Coinbase, which sought greater transparency on the regulatory measures impacting the crypto sector.
These documents specifically pertain to the “pause letters” sent in 2022. These letters were issued to 24 financial institutions, advising them to halt or avoid offering services related to cryptocurrency.
“Our decision to release these documents reflects a commitment to enhance transparency, beyond what is required by the Freedom of Information Act (FOIA), while also attempting to fulfill the spirit of the FOIA request,” Hill said in a statement.
In response to Coinbase’s FOIA request seeking details about a reported 15% deposit cap on crypto-friendly banks, the FDIC released relevant documents in December 2024. However, these documents were heavily redacted. On January 3, 2025, a less censored version was published.
Coinbase’s Chief Legal Officer, Paul Grewal, noted that the uncensored version included two additional letters that had been previously withheld.
FDIC Strategy and Delays
In a recent post on X, Grewal reiterated claims that the FDIC is withholding additional “pause letters” that could shed more light on the regulator’s actions.
“We were right. The previous FDIC leadership lied to us all,” Grewal wrote.
Hill noted that the newly released documents reveal that requests from banks to offer crypto-related services were consistently met with resistance from the FDIC. He explained that, in many cases, the regulator demanded additional information from banks and, in some instances, remained unresponsive for extended periods.
“Both individually and collectively, these and other actions sent the message to banks that it would be extraordinarily difficult — if not impossible — to move forward. As a result, the vast majority of banks simply stopped trying,” Hill stated in the press release.
The FDIC used a strategy in which it first sent banks a letter urging them to suspend crypto-related services and requesting more details. After receiving responses, the regulator would place the requests on hold, causing banks to ultimately abandon their crypto offerings.
According to the released documents, the FDIC identified several key factors in its decision to halt crypto-related services. These included concerns over the volatility of Bitcoin (BTC), potential reputational risks for the banks involved, and the need to protect consumers from potential harm.
Read More
- FDIC Destroyed Operation Chokepoint Docs, Says Senator Lummis
- SEC’s Peirce Calls for End to ‘Operation Chokepoint 2.0,’ Proposes New Path for Crypto
- Underbanked Americans Turning to Crypto More Than Fully Banked Households – FDIC
Michaela has no crypto positions and does not hold any crypto assets. This article is provided for informational purposes only and should not be construed as financial advice. The Shib Magazine and The Shib Daily are the official media and publications of the Shiba Inu cryptocurrency project. Readers are encouraged to conduct their own research and consult with a qualified financial adviser before making any investment decisions.
