Any institution supervised by the Federal Deposit Insurance Corporation (FDIC) that plans to engage in crypto-related activity must now notify the FDIC of its intention and provide all information necessary to establish a dialogue with the agency about the risks. related to such activity.
This requirement follows FDIC guidelines issuing from a financial institution letter (FIL) April 7 to all FDIC-supervised financial institutions (i.e., state-chartered banks that are not members of the Federal Reserve System) requiring notification to the agency if the institution is engaged or intends to engage in crypto-related activities. “Crypto-related activities” are defined in the FIL as “acting as custodians of crypto-assets; maintaining reserves of stablecoins; issue cryptocurrencies and other digital assets; act as market makers or exchange or redemption agents; participate in blockchain and distributed ledger. settlement or payment systems based, including the performance of node functions; as well as related activities such as research activities and loans. »
In addition to notifying the FDIC of proposed new crypto-related activities, the agency also said that any institution it oversees that is currently engaged in crypto-related activities should also promptly notify it. The specific information requested by the FDIC in connection with these notifications is set forth in the FIL.
In announcing these requirements, the FDIC noted that crypto-related activities can pose significant security and financial soundness and stability risks and may also raise consumer protection concerns. In particular, the FDIC has noted that credit, liquidity, market, price, and operational risks could be created by such activities, and that these issues may, individually or collectively, present security and soundness concerns. Regarding security and soundness issues, the FDIC has stated that there are anti-money laundering and terrorist financing implications inherent in crypto activities. The agency also noted that the structure of crypto assets could create disruption based on the interconnected nature of certain crypto-related activities, thereby threatening financial stability.