FDIC Makes Crypto Evaluation a Priority This Year Citing Significant Security and Financial System Risks” – Regulation

The US Federal Deposit Insurance Corporation (FDIC) has made valuing crypto assets a priority this year. “The rapid introduction of a variety of crypto-asset or digital asset products into the financial system could create significant safety and soundness and financial system risks,” the FDIC said.

Crypto Evaluation Named a Priority for FDIC

The U.S. Federal Deposit Insurance Corporation (FDIC) announced Monday that Acting Chairman Martin J. Gruenberg has released the FDIC's priorities for the coming year.

The FDIC is an independent agency created by the U.S. Congress to maintain the stability and public confidence in the nation's financial system.

One of the priorities is “Assessing Crypto Asset Risks,” the announcement details which states:

The rapid introduction of a variety of crypto-asset or digital asset products into the financial system could pose significant security and soundness risks as well as risks to the financial system.

“It is imperative that federal banking authorities carefully consider the risks posed by these products and determine the extent to which banking organizations can safely engage in activities related to crypto assets,” the agency emphasized.

“To the extent that such activities can be conducted in a safe and sound manner, regulators must provide the banking industry with sound guidance for managing regulatory and consumer protection risks posed by crypto-asset activities,” the FDIC said.

In May last year, the FDIC issued a request for information (RFI) on crypto assets. The agency said it is collecting information and seeking comments from interested parties “on the current and potential activities of the insured depository institutions.”

Jelena McWilliams, who was then chair of the FDIC, said the agency was “laying the foundation for the next chapter of banking by ensuring we have a regulatory framework that allows responsible innovation to thrive.” McWilliams said:

Digital assets are an area where we have seen rapid expansion and innovation in recent years. This RFI gives us the opportunity to gain additional insights into the market and what role banks could play in the future.

Last November, the FDIC, the Board of Governors of the Federal Reserve System (FRB), and the Office of the Comptroller of the Currency (OCC) announced that they work together to set crypto policies for financial institutions.

What do you think about the FDIC making crypto evaluation a priority? Let us know in the comments section below.

Kevin Helms

As a student of Austrian economics, Kevin discovered Bitcoin in 2011 and has been an evangelist ever since. His interests lie in Bitcoin security, open source systems, network effects, and the interface between economics and cryptography.

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