In a sharp departure from its prior stance, the Federal Deposit Insurance Corporation (FDIC) has declared that banks no longer need to seek advance approval before engaging in crypto-related activities.  

The change, announced Friday through Financial Institution Letter FIL-7-2025, effectively rescinds FIL-16-2022, a policy implemented during the Biden administration that required regulated banks to notify the FDIC before touching digital assets. 

The move marks a significant pivot under FDIC Acting Chairman Travis Hill, who signaled a more crypto-friendly regulatory environment as part of a broader reorientation in federal banking oversight.  

"With today’s action, the FDIC is turning the page on the flawed approach of the past three years," Hill said. He framed the updated guidance as the beginning of a new chapter for the agency’s digital assets policy, suggesting that additional reforms are on the horizon. 

While the FDIC emphasized that institutions must still “adequately manage the associated risks” of crypto-related activities, the agency stopped short of requiring any formal pre-approval. Instead, banks are instructed to exercise sound risk management practices and coordinate with their supervisory teams when needed.  

The agency’s revised posture reflects a broader shift within the second Trump administration’s regulatory leadership, where several financial regulators appear to be loosening restrictions on banks seeking exposure to blockchain and cryptocurrency markets. 

Hill’s remarks reflect a deeper ideological rift over the role of regulators in shaping banks' customer engagement strategies.  

In statements preceding his January appointment, Hill declared, “There is no place at the FDIC for anyone who has pushed – explicitly or implicitly – banks to stop serving law-abiding customers.”  

He reiterated that the previous regulatory environment had effectively closed off blockchain-related business opportunities for traditional banks, and promised to reframe that dynamic. 

The latest FIL directs FDIC-supervised institutions to remain vigilant regarding a broad array of risks – market, liquidity, operational, cybersecurity, consumer protection, and anti-money laundering – but makes it clear that these should be assessed through the lens of standard supervisory expectations, not special crypto-specific barriers.  

In doing so, the agency signals its intent to treat digital assets more like any other area of financial innovation. 

This policy shift arrives amid broader federal regulatory movement. On the same day as the FDIC announcement, the Commodity Futures Trading Commission (CFTC) updated its stance on crypto derivatives, stating they will now be regulated similarly to other derivatives.  

That change also marked a step away from the bespoke treatment that digital assets have received under previous administrations.  

Earlier in March, the Office of the Comptroller of the Currency (OCC) also issued guidance affirming that national banks may engage in some cryptocurrency-related activities, so long as they meet the appropriate safety and soundness standards. 

Together, these changes paint a picture of a dramatically shifting regulatory climate in Washington – one increasingly permissive of digital asset integration into traditional financial systems.  

Supporters argue this signals a long-overdue recognition of crypto’s growing relevance and a step toward greater financial innovation. However, critics view it as a risky roll-back of safeguards at a time when the sector remains vulnerable to volatility, cybercrime, and reputational damage. 

Though FIL-7-2025 stresses continued attention to risk, critics are already raising red flags about whether the FDIC is handing banks the keys to a volatile vehicle without a full understanding of the terrain ahead.  

With crypto markets still reeling from high-profile failures and enforcement actions, some regulators and lawmakers may see the move as deregulation by another name. 

What remains clear is that the FDIC is preparing to play a more active and permissive role in shaping the future of digital finance.  

Hill’s statement that the agency is “actively working on a new direction on digital assets policy” suggests the March announcement is merely the beginning.  

Whether this marks a renaissance for regulated crypto in banking – or sets the stage for the next systemic shock – remains an open and increasingly urgent question for the financial services risk community.