Regulatory Inaction on Digital Asset Rules Could Leave Consumers with Few Options in Regulated Banking Sector

CBA & BPI respond to FDIC Request for Information on digital activities of banks


WASHINGTON – The Consumer Bankers Association and the Bank Policy Institute today provided a response to the FDIC’s Request for Information on the digital activities of banks. Given that FinTechs are generally subject to little to no regulation or examination, it is clearly easier for them to innovate in the digital assets space – for example, by issuing or offering trading in cryptocurrencies and stablecoins.  Still, banks remain at the forefront of technological innovation and will seek to maintain that role as the digital assets market evolves.

Digital assets activities present all kinds of risks – consumer, operational and money laundering, to name just a few. Therefore, it is generally safer for consumers and the financial system for these activities to be conducted by well-regulated and well-supervised banks. Unlike FinTech or Big Tech companies, banks hold themselves to high risk-management and compliance standards and have the added benefit of being examined by the federal banking agencies.

“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 practices and know-your-customer programs and have substantial experience with incorporating new technologies into the financial system,” CBA and BPI state in their comment letter. “Banks have the resources, talent and expertise to implement robust compliance programs, which is especially important with respect to digital assets.”

To encourage banks to provide digital-assets products and services, CBA and BPI’s comment letter requests that the federal banking agencies:

  • Adopt a consistent “general permissibility” approach for activities involving digital assets, such that banks may engage so long as they continue to operate in a safe and sound manner.
  • Adopt a clear framework for banks to categorize digital assets to determine the bank’s ability to act as a principal or intermediary in different digital-asset activities.

Without action by the federal banking agencies, consumers are more likely to be left with no choice but to leave the regulated banking sector for FinTechs and other shadow bank service providers that present themselves as safe and comparable alternatives, all while adhering to fewer protections, offering less recourse for harmed consumers and posing greater risks to the financial sector.

Read the full text of the letter here.


About the Consumer Bankers Association:

The Consumer Bankers Association represents America’s leading retail banks. We promote policies to create a stronger industry and economy. Established in 1919, CBA’s corporate member institutions account for 1.7 million jobs in America, extend roughly $4 trillion in consumer loans and provide $275 billion in small business loans annually. Follow us on Twitter @consumerbankers.


About the Bank Policy Institute:

The Bank Policy Institute (BPI) is a nonpartisan public policy, research and advocacy group, representing the nation’s leading banks and their customers. Our members include universal banks, regional banks and the major foreign banks doing business in the United States. Collectively, they employ almost 2 million Americans, make nearly half of the nation’s small business loans, and are an engine for financial innovation and economic growth.