Banking News

US bank regulator FDIC requests input on digital assets

FDIC

Yesterday, banking regulator the Federal Deposit Insurance Corporation (FDIC) published a request for information (RFI) about digital assets, aiming to find out how banks are exploring and participating in the sector. Responses are requested by July 16. While the FDIC is best known for providing deposit insurance, its role is to maintain stability and public confidence in the U.S. financial system.

“At the FDIC, we are laying the foundation for the next chapter of banking by ensuring we have a regulatory framework that allows responsible innovation to flourish,” said FDIC Chairman Jelena McWilliams. “Digital assets is one area in which we have seen rapid expansion and innovation in recent years. This RFI gives us an opportunity to gain additional insight into the market, and what role banks might play in the future.”

The interest comes at a time of public focus on bubbling cryptocurrency prices and multiple digital assets firms such as Anchorage and Paxos have now received trust bank charters. Last year, the Office of the Comptroller of the Currency (OCC) issued multiple interpretive letters, allowing banks to participate in stablecoincustody digital assets and hold stablecoin reserves.

The questionnaire starts by exploring potential use cases in which banks might participate. It outlined five buckets, including technology solutions such as 

  • technology solutions, including operating a node on a blockchain network
  • asset-based activities such as investments, collateral, margin lending and liquidity
  • liability-base activities, including deposits that service as digital asset reserves
  • custodial activities
  • others such as market-making and decentralized financing

The FDIC asks in which services banks are participating or considering. Specifically, it’s interested in if they target consumers, whether they are engaging in secondary lending based on crypto-assets, if their digital assets activities could have a balance sheet impact, or if it is primarily for internal operations.

Unsurprisingly it wants to know about the benefits and risks of digital assets and bank product offerings.

A lack of clarity is often an issue raised in the digital asset sector, and the FDIC asked whether more clarity is needed from the FDIC, particularly relating to supervision.


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