Overview
On March 28, 2025, the Federal Deposit Insurance Corporation (FDIC) announced the withdrawal of Financial Institution Letter (FIL) 16-2022, paving the way for FDIC-supervised institutions to engage in permissible digital asset activities without receiving prior FDIC approval.1 This action follows the Office of the Comptroller of the Currency's (OCC) recent rescission of its Interpretive Letter 1179, which had required that OCC-regulated banks receive written supervisory non-objection prior to engaging in digital asset activities, such as offering custody services, holding stablecoin reserves, and using blockchain technology to facilitate payments.2
The FDIC's action may offer broader relief than the recent OCC action. While the OCC's Interpretive Letter 1183 applies to the three categories of activities listed above and rescinds prior OCC action limiting those activities, the March 28th FDIC action applies more generally to "crypto-related activities," which "include, but are not limited to, acting as crypto-asset custodians; maintaining stablecoin reserves; issuing crypto and other digital assets; acting as market makers or exchange or redemption agents; participating in blockchain- and distributed ledger-based settlement or payment systems, including performing node functions; as well as related activities such as finder activities and lending."3
Under the withdrawn FIL-16-2022, FDIC-regulated institutions were required to notify the FDIC before engaging in crypto-related activity.4 Upon receipt of notification and information about the proposed activities, the FDIC would review and "provide relevant supervisory feedback" to the institution.5 As a practical matter, this notice requirement has operated to slow the integration of crypto-related activities at financial institutions.
The FDIC also stated that it will work with other banking agencies to replace the January 2023 Joint Statement on Crypto-Asset Risks to Banking Organizations and the February 2023 Joint Statement on Liquidity Risks to Banking Organizations Resulting from Crypto-Asset Market Vulnerabilities, forecasting a friendlier environment for crypto-asset activity in the traditional banking system.6 Steptoe will continue to monitor and updates as these events occur.
1 Federal Deposit Insurance Corporation, Financial Institution Letter 7-2025, FDIC Clarifies Process for Banks to Engage in Crypto-Related Activities (Mar. 28, 2025) https://www.fdic.gov/news/financial-institution-letters/2025/fdic-clarifies-process-banks-engage-crypto-related#footnote2.
2 See Office of the Comptroller of the Currency, Interpretive Letter 1183, OCC Letter Addressing Certain Crypto-Asset Activities (Mar. 7, 2025) https://occ.gov/news-issuances/news-releases/2025/nr-occ-2025-16.html.
3 FIL-7-2025 at n.1.
4 Federal Deposit Insurance Corporation, Financial Institution Letter 16-2022, Notification and Supervisory Feedback Procedures for FDIC-Supervised Institutions Engaging in Crypto-Related Activities (Apr. 7, 2022) https://www.fdic.gov/news/financial-institution-letters/2022/fil22016.html#letter.
5 Id.
6 Available at https://www.fdic.gov/sites/default/files/2024-03/pr23002a.pdf and https://www.fdic.gov/sites/default/files/2024-03/fil23008a.pdf, respectively.
