Joint Comment Letter on FDIC RFI on Digital Assets

Dear Mr. Sheesley,

The Bank Policy Institute and the Consumers Bankers Association (together, the "Associations") appreciate the opportunity to comment on the request for information issued by the Federal Deposit Insurance Corporation seeking input regarding insured depository institutions' current and potential activities related to digital assets. Banks have traditionally been at the forefront of technological innovation, and as more use cases emerge for digital assets, the Associations' members are evaluating where and how these innovations can be applied in their own businesses to best serve the needs of customers (or potential customers). This letter underscores the importance of bank involvement in the digital assets space, provides an overview of current bank practice and involvement, and addresses two key principles that we believe should guide the FDIC, the OCC and the Federal Reserve (the "federal banking agencies") in approaching the regulation of digital assets.

I. The Importance of Bank Involvement in Digital Asset Product and Services

Both the public and federal banking agencies benefit from increased involvement by banks in offering digital asset products and services. Banks are already subject to comprehensive and robust risk management, supervision and examination processes, are subject to consumer protection laws and regulations, maintain strong capital buffers, carry deposit insurance, undertake well-developed anti-money laundering ("AML") practices and know-your-customer ("KYC) programs, and have substantial experience with incorporating new technologies into the financial system. Banks have the resources, talent and expertise to implement robust compliance programs, which is especially important with respect to digital assets, which present novel  AML risks. To encourage banks to provide digital asset products and services, federal banking agencies should clarify and expand existing supervisory guidance to (1) clearly and unambiguously state that banks are permitted to engage in any activity - regardless of the involvement of digital assets - so long as a bank has the power and authority to provide a particular product or service and continues to operate in a safe and sound manner and (2) develop a regulatory framework for banks to independently apply to the treatment of digital assets.

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