Written by: Marcus Wolter, Takahiro Miyazaki, and Crystel Saraie

On March 28, 2025, the Federal Deposit Insurance Corporation (FDIC) issued Financial Institution Letter 7-2025 (FIL-7-2025), marking a significant shift in how banks can engage with cryptocurrency activities. This guidance rescinds previous requirements for FDIC-supervised institutions to obtain prior approval before engaging in crypto-related activities, aligning with broader efforts by federal regulators to facilitate innovation in the financial sector.

Background

Prior to FIL-7-2025, the FDIC had established a more cautious approach to cryptocurrency through Financial Institution Letter 16-2022 (FIL-16-2022). This earlier guidance mandated that banks notify the FDIC and receive supervisory nonobjection before engaging in certain crypto-asset activities. The requirement was part of a broader regulatory framework that aimed to ensure safety and soundness in banking operations involving digital assets.

However, this approach was seen as restrictive and often discouraged banks from exploring crypto-related opportunities. The FDIC’s latest move follows similar actions by the Office of the Comptroller of the Currency (OCC), which also eased restrictions on national banks engaging in digital asset activities [1].

Key Points of FIL-7-2025

  1. Removal of Prior Notification Requirement: FIL-7-2025 rescinds the need for FDIC-supervised institutions to notify the FDIC before engaging in permissible crypto-related activities. This change streamlines the process for banks interested in digital assets.
  2. Permissible Activities: The letter reaffirms that activities such as crypto-asset custody, certain stablecoin activities, and participation in independent node verification networks are permissible for FDIC-supervised institutions.
  3. Risk Management: While prior approval is no longer required, banks must still manage risks associated with crypto activities, including market, liquidity, operational, and cybersecurity risks, as well as consumer protection and anti-money laundering obligations.
  4. Future Guidance: The FDIC plans to work with other federal banking regulators to replace existing interagency statements on crypto-asset risks, potentially paving the way for broader engagement in digital asset activities.

Key Implications

FIL-7-2025 is poised to significantly impact the crypto and banking sectors by removing some of the regulatory barriers that have traditionally limited bank involvement in digital assets. This increased bank participation could foster greater innovation and facilitate the integration of digital assets into conventional banking services. Additionally, the guidance may improve access to essential banking services—such as deposit accounts and loans—for nonbank crypto market participants, thereby enhancing the legitimacy and stability of the crypto sector. Moreover, the policy shift reflects a broader federal trend toward regulatory alignment in favor of digital assets, echoing similar initiatives by the Office of the Comptroller of the Currency (OCC) and potentially shaping future actions by the Federal Reserve.

In summary, FIL-7-2025 represents a significant step forward in the integration of cryptocurrency into mainstream banking, signalling a more open and supportive regulatory environment for digital asset activities. As banks and financial institutions explore these opportunities, the implications for both the crypto sector and traditional banking are likely to be profound.

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[1] Steinberg Barrage, A., Bornfreund, M., & Ostroff, E. G. (2025, March 31). FDIC turns a new page on Banks’ engagement in crypto-related activities. Financial Services Blog. https://www.troutmanfinancialservices.com/2025/03/fdic-turns-a-new-page-on-banks-engagement-in-crypto-related-activities/

[2] Saulsbery, G. (2025, April 1). FDIC eases crypto rules for Banks. Yahoo! Finance. https://finance.yahoo.com/news/fdic-eases-crypto-rules-banks-122247018.html

[3] FDIC permits banks to engage in crypto. Markets Media. (2025, March 31). https://www.marketsmedia.com/fdic-permits-banks-to-engage-in-crypto/

[4] Goodman, K., Levin, D., & Moyer, E. (2025, April 3). FDIC: Banks can engage in crypto-related activities without prior notice. JD Supra. https://www.jdsupra.com/legalnews/fdic-banks-can-engage-in-crypto-related-4237401/

[5] Hamid, J. (2025, March 28). FDIC says banks no longer need permission to handle crypto. Cryptopolitan. https://www.cryptopolitan.com/fdic-says-banks-can-handle-crypto/

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