FDIC Set to Unleash Banks into Crypto: Bitcoin's $500K Future Beckons

The U.S. Federal Deposit Insurance Corporation (FDIC) is set to revise its guidelines, allowing banks to engage in cryptocurrency activities. This shift comes as part of a broader change in the U.S. under the pro-crypto Trump administration, which aims to overhaul policies toward digital assets.

The FDIC is reportedly planning to update its rules to enable banks to operate within the crypto sector without needing prior regulatory approval. This move could accelerate the growth of cryptocurrencies like Bitcoin, which Standard Chartered forecasts to hit $500,000 by 2028.

In a significant development, the FDIC is actively reevaluating its regulatory approach to cryptocurrency-related activities. This includes replacing Financial Institution Letter (FIL) 16-2022 and providing institutions with a pathway to engage in cryptocurrency and blockchain-related activities while adhering to safety and soundness principles.

The FDIC's Acting Chair Travis Hill has indicated a shift in the agency's regulation of banks involved in cryptocurrency activities. This means that banks can custody customers' cryptocurrency and it will be insured by the FDIC. The Biden administration's Choke Point FIL 16-2022 letter has been rescinded and replaced.

The FDIC is unsealing 175 documents that expose how U.S. institutions were instructed to be deprived of crypto-related services. The documents reveal that the FDIC made it difficult for banks to expose themselves to digital assets and blockchain services, leading many to give up trying.