FDIC and CFTC Ease Crypto Restrictions for Banks and Derivatives

The Federal Deposit Insurance Corporation (FDIC) announced in a letter on March 28 that institutions under its supervision, including banks, can now engage in crypto-related activities without prior approval. This announcement came alongside the Commodity Futures Trading Commission (CFTC) stating that digital asset derivatives will not be treated differently from other derivatives.

The FDIC letter rescinds a previous directive issued under former U.S. President Joe Biden’s administration, which required institutions to notify the agency before engaging in crypto-related activities. According to the FDIC’s definition:

“Crypto-related activities include, but are not limited to, acting as crypto-asset custodians; maintaining stablecoin reserves; issuing crypto and other digital assets; acting as market makers or exchange or redemption agents; participating in blockchain and distributed ledger-based settlement or payment systems, including performing node functions; and related activities such as finder activities and lending.”

FDIC-supervised institutions should consider the associated risks when engaging in crypto-related activities. These risks include market and liquidity risks, operational and cybersecurity risks, consumer protection requirements, and Anti-Money Laundering obligations.

CFTC: Digital Asset Derivatives Will Not Be Treated Differently

The U.S. crypto derivatives market had been operating in a gray area due to regulatory uncertainty, but that is changing. On March 28, the CFTC withdrew a staff advisory letter to ensure that digital asset derivatives—a type of trading product—will not be treated differently from other derivatives. This change is “effective immediately.”

This shift in approach from the CFTC and FDIC reflects a new environment under U.S. President Donald Trump’s administration. Trump had vowed to make the U.S. “the crypto capital of the planet.”

Crypto companies are adjusting their strategies to align with the easing regulatory climate. On March 10, Coinbase announced the offer of 24/7 Bitcoin and Ether futures. In addition, the company is reportedly planning to acquire the crypto derivatives exchange Derebit.

Another U.S.-based crypto exchange, Kraken, has also made moves in the derivatives market. On March 20, it announced plans to acquire NinjaTrader, which would allow it to offer crypto futures and derivatives in the United States.

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