The Federal Deposit Insurance Corporation (FDIC) has rescinded previous guidance requiring banks to obtain prior approval before engaging in crypto-related activities, marking a significant policy shift for the US banking regulator.

In an announcement on 28 March, the FDIC clarified that supervised institutions may now engage in permissible crypto-related activities without receiving prior FDIC approval, provided they adequately manage associated risks.

"With today's action, the FDIC is turning the page on the flawed approach of the past three years," said acting FDIC chairman Travis Hill in a statement.

The new guidance reverses a 2022 Financial Institution Letter (FIL-16-2022) that had established a prior notification requirement specific to crypto-related activities. The policy change comes as part of a broader shift in regulatory approach under the Trump administration.

The FDIC's announcement follows a similar move by the Office of the Comptroller of the Currency (OCC), which earlier this month also cleared the way for banks to engage in certain cryptocurrency-related activities without prior approval.

The regulator's statement emphasises that banks should still consider all associated risks—including market and liquidity risk, operational and cybersecurity risks, consumer protection requirements, and anti-money laundering requirements—and engage with their supervisory teams as appropriate.

The FDIC also indicated it would work with other banking agencies to replace interagency documents issued in January and February 2023 related to crypto-assets, which had previously cautioned banks against participating in the crypto industry.

This regulatory shift occurs against the backdrop of the Trump administration's more favourable stance toward cryptocurrency. Earlier in March, the administration hosted a Crypto Summit to promote the use of digital assets, with Treasury Secretary Scott Bessent and Commerce Secretary Howard Lutnick reportedly asking agencies to remove obstacles that made it difficult for crypto companies to work with the banking sector.

The Federal Reserve, which joined the FDIC and OCC in issuing the 2023 joint warning to banks following the crash of the terra stablecoin and the fall of FTX, had not issued an update as of Friday, though Federal Reserve chair Jerome Powell told lawmakers during a congressional hearing last month that the central bank would take a fresh look at the guidance.

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