Author: Aiying Aiying pony; Source: Aiying Compliance

The book was officially announced this time. On March 28, 2025, the Federal Deposit Insurance Company (FDIC) issued a major document - a letter from the Financial Institutions (FIL-7-2025). This new rule has changed the past cautious and even slightly conservative regulatory attitude, opening a door for banks to participate in cryptocurrency and digital asset-related activities. Compared with FIL-16-2022 in 2022, the biggest highlight of the new regulations is that banks no longer need to submit applications to the FDIC in advance or wait for approval. As long as the risks are controlled, they can directly carry out crypto business within the scope of the license, but it should be emphasized that the burden of risk management is also handed over to the bank itself.

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1. What exactly does the new regulations say?

1. Release: From "request for instructions" to "self-determination"

The core changes in the new regulations can be summarized in one sentence: When banks carry out encryption-related activities, they do not need to submit approval to the FDIC in advance, but only need to ensure that the activities comply with security and robustness standards. Compared with the requirements in 2022, this reduces the cumbersome pre-approval links, giving banks greater operational space. Travis Hill, acting chairman of FDIC, said bluntly at the press conference: "We are turning a new chapter and saying goodbye to the conservative practices of the past three years. This is just the first step, and there will be more measures in the future to help banks embrace crypto and blockchain technology under the premise of compliance." 2. Coverage: Not just cryptocurrencies

Don't think that the new regulations are only aimed at Bitcoin or Ethereum. It actually covers the broader meaning of “digital assets” and “emerging technologies.” This means that banks can explore more than cryptocurrency transactions, but also digital asset custody, blockchain payment settlement, and even issuing their own digital products. FDIC's vision is obviously longer-term, trying to pave the way for the entire financial technology ecosystem.

3. Regulatory bottom line: flexibility does not mean laissez-faire

Although the approval threshold has been lowered, the FDIC repeatedly emphasizes that "risk management" is the prerequisite. In other words, banks have greater freedom, but they also have to take on more responsibilities themselves. The volatility, technical complexity and potential legal risks of the crypto market all require banks to come up with real skills.right.

4. Industry significance: The window period is coming

For the banking industry, this is a signal to lower the entry threshold and accelerate innovation. In the past, cumbersome regulatory processes have discouraged many banks from the crypto market. Now, loosening means banks can respond to customer needs faster and launch new products. But at the same time, the FDIC's post-scrutiny still exists and banks cannot take it lightly.

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2. For banks, opportunities and challenges coexist

1. Opportunities: new businesses and new markets

Satisfies customer needs: As cryptocurrencies gradually enter the mainstream, customers' demand for related services has risen. Whether individual investors or corporate customers, they hope that banks can provide crypto asset custody, payment gateways or digital currency exchange services. The new regulations give banks the opportunity to fill this gap and tap new revenue growth points.

Seize innovation opportunities: After the process is simplified, banks can launch products faster. For example, develop a blockchain-based payment system, or cooperate with crypto companies to provide joint services. This flexibility is particularly critical in the competition for fintech. Whoever acts first will likely occupy the commanding heights of the market.

2. Challenge: Risk management is a tough battle

Market and technical risks: Price fluctuations, technical vulnerabilities, and hacker attacks in the crypto market are all clichés but unavoidable issues. Banks must be able to deal with these uncertainties.

Compliance pressure: Although there is no need to submit approval in advance, the FDIC's post-supervision is still strict. If a bank makes mistakes in risk management, it may face the risk of fines or even business suspension. The compliance cost has not been really reduced, it has just changed its form.

A example: XYZ Bank's attempt

Imagine a medium-sized bank, "XYZ Bank", which decided to test the waters of crypto asset custody after the new regulations were issued. They found a reliable blockchain technology company to cooperate with, built a cold storage system, and specially formulated emergency plans to prevent hackers and asset losses. Before going online, they took the initiative to chat with FDIC to make sure the direction is correct. After passing, the encryption market will definitely be a hot topic. After all, for many institutions, this market will be fully competitive.Come on, the threshold and cost will be reduced, and the infrastructure of bank channels will be more diversified.

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3. Impact of the new FDIC regulations (FIL-7-2025) on the banking and the crypto market

Aiying believes that with the implementation of the new regulations, banks will accelerate their layout in the crypto market, and crypto services are expected to become the standard configuration for the banking industry.

As the participation of banks will promote the integration of crypto markets into the mainstream financial system, the institutional adoption of digital assets will improve market liquidity and stability and attract more traditional investors to enter.

In the next 2-3 years, banks will widely launch services such as crypto asset custody, digital currency exchange and blockchain payment. Large banks will take the lead in taking advantage of their resource advantages, while small and medium-sized banks may quickly follow up through cooperation or outsourcing technology.

Banks will develop differentiated products based on their own positioning. For example, private banks may launch crypto asset management services for high-net-worth customers, while retail banks focus on crypto payments and savings products.

Banks will establish partnerships with more crypto companies, such as partnering with stablecoin issuers to launch digital payment services, or sharing trading interfaces with crypto exchanges.

Large banks may quickly gain technology and market share by acquiring or investing in cryptotech companies. Bank investment in crypto startups is expected to increase significantly from 2025 to 2026.