Money center banks are one of the most highly regulated sectors within Corporate America, which largely explains their reluctance to embrace bitcoin.
Typically, traditional banks are primarily involved with bitcoin and the broader cryptocurrency market by allowing customers to fund accounts on domestic crypto exchanges like CoinBase. They also facilitate the receipt of deposits from these brokers. However, new guidance from the Federal Deposit Insurance Corporation (FDIC) could ignite a fresh wave of bitcoin adoption within banks, potentially benefiting ETFs such as the CoinShares Valkyrie Bitcoin Fund (BRRR).
On March 28, the FDIC released a statement announcing the rescindment of a 2022 financial institution letter (FIL) concerning crypto-related activities. This letter previously mandated that member banks inform the FDIC before engaging in any crypto endeavors.
With the withdrawal of this letter, banks are now able to expand their bitcoin operations as long as they maintain adequate risk management protocols.
Further Signs of Relaxing Crypto Regulations
While bitcoin advocates and holders of ETFs like BRRR are understandably disappointed by the cryptocurrency’s price movements in 2025, President Trump has fulfilled his commitments to ease crypto regulations. These initiatives aim to position the U.S. as a frontrunner in digital currency innovation, and the recent FDIC letter aligns with these objectives.
The FDIC will continue collaborating with the President’s Working Group on Digital Asset Markets and anticipates issuing additional guidance in the future to clarify banks’ participation in specific crypto-related activities,” stated the FDIC.
The agency also mentioned its intention to work alongside other banking regulators to replace earlier joint statements on crypto regulations released in early 2023. This could indicate that the Trump administration is keen on making its imprint on this sector.
While it remains uncertain whether these relaxed regulations in the U.S. will lead to wider bitcoin adoption and increased prices, it is evident that the FDIC is extending a level of trust to banks to undertake crypto activities, provided they do so judiciously.
This FIL clarifies that FDIC-supervised institutions may engage in allowable crypto-related activities without prior FDIC approval, in contrast to FIL-16-2022, which required prior notification for such activities,” concluded the regulator. “As with all activities, FDIC-supervised institutions should assess the associated risks— including, but not limited to, market and liquidity risk; operational and cybersecurity risks; consumer protection obligations; and anti-money laundering requirements— and should consult with their supervisory team as necessary.”
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