FDIC Ends Reputational Risk Criteria in Crypto Industry
- FDIC ends reputational risk criteria for crypto industry.
- Crypto leaders hail decision as significant progress.
- Policy change may enhance crypto market confidence.
The Federal Deposit Insurance Corporation (FDIC) announced the cessation of its reputational risk criteria in the cryptocurrency sector, calling it a major policy shift. The removal aligns with industry demands and may foster more confidence in banking crypto firms.
FDIC Scraps Reputational Risk Measures for Crypto
The FDIC’s decision to end reputational risk assessments comes amid calls from the crypto sector. Previous policies restricted banking services based on perceived industry risks. This move aligns with industry calls for more equitable treatment. The crypto community champions this change, predicting increased stability and opportunity.
Crypto Firms See Confidence Boost in Banking Access
Immediate effects include boosted confidence among crypto firms. The decision is expected to encourage banks to reconsider servicing crypto businesses. The Crypto Czar praised it as “a big win,” highlighting potential increased banking access for crypto companies. Experts anticipate more banks will partner with crypto firms, potentially growing the sector.
Past Policies and Global Regulatory Alignment
Historically, reputational risk policies have posed challenges for industries seen as nontraditional. Similar past revisions have led to growth in industry partnerships. Experts suggest this change may pave the way for broader acceptance. Data suggests this could align U.S. regulations more closely with other global financial hubs.
“Looking forward, we are actively reevaluating our supervisory approach to crypto-related activities. This includes replacing Financial Institution Letter (FIL) 16-2022 and providing a pathway for institutions to engage in crypto- and blockchain-related activities while still adhering to safety and soundness principles.” — Travis Hill, Acting Chairman of the FDIC
