The Federal Deposit Insurance Corporation (FDIC) shattered its crypto chains on March 28, 2025, scrapping a 2022 requirement that forced banks to seek permission before engaging in digital assets. This sweeping policy reversal means financial institutions can now plunge into crypto activities without the government’s blessing first. About time, right?
The new guidance, outlined in Financial Institution Letter FIL-7-2025, signals a dramatic shift from the Biden administration’s restrictive approach. Banks can now engage in “permissible crypto-related activities” as long as they manage the risks appropriately. No more regulatory hoops to jump through. No more begging for permission.
Acting Chairman Travis Hill didn’t mince words, calling the change a way of “turning the page on flawed approach.” He promised additional steps to outline the agency’s new crypto stance, while taking a not-so-subtle jab at the previous administration’s lack of transparency and reliance on non-public enforcement tactics. Ouch.
Regulators finally ditching the secret crypto handshakes and letting banks play ball without permission slips.
This move aligns with the Office of the Comptroller of the Currency’s recent reaffirmation of crypto activities. The agencies are finally playing nice together. The FDIC plans to work with the President’s Working Group on Financial Markets to issue fresh guidance on digital assets, replacing outdated interagency documents.
For the banking industry, this could release a flood of capital into the crypto sector. The policy shift would enable traditional banks to develop their own DeFi products to remain competitive in the evolving financial landscape. This policy change could unlock new opportunities for banks looking to diversify their digital asset offerings. Banks can now reassess their digital asset strategies without bureaucratic roadblocks. The American Bankers Association is practically doing cartwheels over the regulatory clarity.
Cryptocurrency advocates are celebrating too. Coinbase, which previously accused the FDIC of running “Operation Choke Point 2.0,” can now breathe easier. Bo Hines called it a “huge step forward” for innovation.
Not everyone’s thrilled, though. Critics warn about potential financial instability. Banks still need to navigate market risks, cybersecurity concerns, and anti-money laundering obligations.
But the message is clear: the crypto crackdown era is over. Banks, start your engines.
