US FDIC Allows Banks to Engage in Crypto

The FDIC announced that banks can now engage in crypto-related activities, including buying, selling, and custodying crypto-assets, without prior approval, effective December 21, 2025.

This change may increase bank participation in crypto markets, signaling potential growth in institutional capital flows and reshaping the financial landscape.

The FDIC has rescinded its 2022 requirement, allowing banks to engage in crypto-related activities without prior notification. This includes buying, selling, and custodying crypto-assets, provided that risk management measures are in place. For detailed guidance, refer to the FDIC clarifies banks’ engagement with crypto-related activities.

Announced on December 21, 2025, the change allows FDIC-supervised banks enhanced flexibility. The decision involved interagency coordination with the Federal Reserve and OCC, aligning with efforts to foster innovation. As the Federal Reserve discusses banks’ roles with stablecoins and financial intermediation, these developments highlight an evolving regulatory landscape.

The banking sector could see increased institutional capital flows as a result of this policy. The lifting of barriers is expected to facilitate greater engagement with cryptocurrencies such as Bitcoin, Ether, and USDC.

The financial industry may experience a shift toward digital asset services. As noted, “Banking regulators are increasingly promoting innovation while ensuring a safe and sound manner of crypto engagement,” which emphasizes a trend toward regulatory adaptation.

Potential impacts include enhanced bank offerings in custody and stablecoin services. The shift could influence the broader cryptocurrency market and DeFi sector, impacting liquidity and other financial activities.

Regulatory changes may boost institutional involvement in crypto, replicating historical trends in other innovative sectors. The foundations laid could transform the banking landscape by integrating crypto services into traditional financial systems. For insights into the legal and regulatory dynamics, explore NCSL’s 2025 state legislation on cryptocurrency and digital assets.