Money center banks are among the most regulated industries in Corporate America. That explains why they’ve long shied away from bitcoin.
For the most part, traditional banks’ most direct involvement with bitcoin and the cryptocurrency space at large is allowing customers to fund accounts on U.S.-based crypto exchanges, such as CoinBase. It also allows them to receive deposits from those brokers. However, new guidance from the Federal Deposit Insurance Corporation (FDIC) could stoke a new wave of bitcoin adoption by banks. That could be good news for ETFs like the CoinShares Valkyrie Bitcoin Fund (BRRR ).
On March 28, the FDIC issued a statement saying it rescinded the 2022 financial institution letter (FIL) Notification of Engaging in Crypto-Related Activities. That letter essentially states that member banks must notify the FDIC before engaging in crypto activities.
With the rescinding of that letter, banks can loosen up their bitcoin activities. But that’s provided that they have proper risk management protocols in place.
More Evidence of Loosening Crypto Regulations
Undoubtedly, bitcoin bulls and those owning ETFs such as BRRR are miffed by the digital currency’s 2025 price action. But President Trump has lived up to pledges to loosen crypto regulations. These pledges were made with the aim of making the U.S. a leader in digital currency innovation. The FDIC letter is in line with those efforts.
“The FDIC will continue to engage with the President’s Working Group on Digital Asset Markets and expects to issue further guidance in the future to provide additional clarity regarding banks’ engagement in particular crypto-related activities,” according to the FDIC.
The institution also noted it will work with other banking regulators to replace joint statements on crypto regulations issued in early 2023. That’s potentially another sign that the Trump administration wants to leave its own mark on the space.
It remains to be seen if relaxed regulations in the U.S. will translate to broader bitcoin adoption and higher prices, but it is clear the FDIC is extending some trust to banks to conduct crypto activities, provided they do so with prudence in mind.
“In contrast to FIL-16-2022, which established a prior notification requirement specific to crypto-related activities, this FIL clarifies that FDIC-supervised institutions may engage in permissible crypto-related activities without receiving prior FDIC approval,” concluded the regulator. “As with all other activities, FDIC-supervised institutions should consider the associated risks—including, but not limited to, market and liquidity risk; operational and cybersecurity risks; consumer protection requirements; and anti-money laundering requirements—and should engage with their supervisory team as appropriate.”
For more news, information, and analysis, visit the Crypto Channel.
