FDIC to Reassess Bank Oversight and Crypto Access
The Federal Deposit Insurance Corporation (FDIC) is preparing to review a proposed rule that could have far-reaching implications for how banks engage with cryptocurrency businesses. The discussion follows growing concern over alleged “debanking” practices, where financial institutions reportedly restricted services to crypto-linked companies due to perceived regulatory risk.
In a recent notice, the FDIC confirmed that its board of directors will consider a rulemaking proposal addressing the “prohibition on use of reputation risk by regulators.” While the agenda did not explicitly reference digital assets, industry observers say the decision could directly influence how U.S. banks interact with crypto firms.
Trump’s Executive Order and ‘Operation Chokepoint 2.0’ Allegations
The review aligns with statements from Acting FDIC Chair Travis Hill, who has previously criticized regulators for citing reputation risk to justify restrictions on banks dealing with crypto-related businesses. His stance echoes a recent executive order signed by President Donald Trump that aims to guarantee “free banking” and curb what he described as “politicized or unlawful debanking activities.”
Before the executive order, many crypto companies claimed they were systematically denied banking access — a phenomenon some have compared to the controversial “Operation Chokepoint 2.0”, where regulators allegedly pressured banks to cut ties with certain industries.
Court filings made public in late 2022 revealed that the FDIC had instructed several institutions to pause all crypto-related activity, sparking widespread debate over regulatory overreach.
Regulatory Shifts and Political Implications
The renewed focus on crypto banking comes as the FDIC seeks to “reevaluate [its] supervisory approach to crypto-related activities,” according to Hill. Supporters of the initiative say a clearer, more consistent framework would restore confidence among banks and reduce uncertainty for compliant crypto firms seeking traditional financial services.
However, critics warn that relaxing oversight too far could increase systemic risk, especially as stablecoins and onchain payment systems continue expanding into mainstream finance.
The upcoming FDIC board meeting may set the tone for how U.S. regulators balance innovation and risk in the evolving digital finance sector. With the federal government currently in partial shutdown, the FDIC confirmed it remains fully operational, ensuring that the rule review process will continue as planned.
If enacted, the new guidelines could open the door for wider banking access for crypto firms, potentially ending years of tension between digital asset innovators and the traditional banking establishment.
Disclaimer
This content is for informational purposes only and does not constitute financial, investment, or legal advice. Cryptocurrency trading involves risk and may result in financial loss.