On March 28th, 2025, crypto enthusiasts everywhere rejoiced when the FDIC reversed several anti-crypto policies that had been enforced during the Biden era. But are these reversals good for the people, or just the banks?
While we are always happy that cryptocurrency is becoming more mainstream, this latest policy reversal may not be the godsend everyone thinks it is. Keep reading to learn more.
What Did the FDIC Reverse?
In 2022, the FDIC issued a regulation that required banks to get federal approval prior to engaging in cryptocurrency activities. Approvals, which never seemed to arrive, as many blockchains fought for their rights in court.
This restriction was widespread, causing issues for specific platforms as well as the market behemoth Coinbase. Though many of these battles were resolved in the court room, banks around the United States were left holding an empty bag as they waited for the promised approvals that never materialized.
If this weren’t exciting enough, the OCC also recently rescinded its 2022 issued guidance on cryptocurrency/blockchain adoption.
What Does This Reversal Mean for Banks?
Well, in the notice of the reversal issued on Friday, it was stated that banks can begin researching and using cryptocurrency as long as the “risks are considered.” However, the acting chairman of the FDIC, Travis Hill, did mention that further regulations may be coming down the road. But for right now, the policy that was holding banks back is gone.
While we are happy about this, and we expect several banks to begin using blockchain technology and offering cryptocurrency options to customers, we have several concerns as well.
The Dangers of Federal Banks Using Cryptocurrency
Remember, cryptocurrencies like Bitcoin were invented for the people, by the people, and we always hesitate when we hear of the government getting involved. Although we truly believe that Bitcoin is the currency of the future, governments can’t control Bitcoin like they do inflation (the one good aspect, because look how bad the government is on controlling inflation) but they can track its use in a way that isn’t our favorite. So, keep that in mind, that whenever you spend Bitcoin, the government probably can find out.
Which brings our other concerns to the surface. If banks were just given the greenlight on Bitcoin, we wouldn’t be as worried. But they have been given the green light on all cryptocurrencies. This means that banks can possibly involve themselves in scam cryptocurrency projects.
Even though there are many honest and amazing projects in crypto (Bitcoin, Ethereum, Solana, just to name a few), there are far more scams. There are also many tokens which aren’t scams, but are used by celebrities to rob the uneducated (Dogecoin and Trump Token). And we fear that banks will begin getting involved in these projects because they are cheaper—not realizing the risks associated with these types of blockchain projects.
We also worry that many individuals who don’t know much about crypto will be introduced to the industry by their banks—maybe even be pressured into something they know nothing about, which could be a disaster in the long run. After all, even FTX looked like a good project on the surface when it was really a scam.
That brings us to our other concern. The fact that Travis Hill said that future regulation is pending. The last thing we want is for banks to pour a lot of money into blockchain or cryptocurrency just for the policy to reverse.
Even if you are confident that the US government won’t be able to enact further policies in the next few years, remember that the next Presidential election is in 2028, and Trump is not eligible for re-election, so there will be someone else in the White House who is perhaps less crypto-friendly.
What Does This Mean For You?
A lot of this is speculation. The policy was just reversed and thus we don’t expect banks to start promoting cryptocurrency projects just yet, but we are sure that a few of them had something in development that they were forced to shut down in 2022.
Regardless, we expect that banks will begin to offer cryptocurrency options to their customers soon. As individuals who have been involved in cryptocurrency for several years, we urge everyone to proceed with caution if your bank approaches you with new options. Though we are reasonably sure Bitcoin won’t go to zero suddenly, it is a possibility, and you should never invest any money you intend to lose.
No matter where you bank, before you make any changes, take some time to learn about the following aspects of cryptocurrency:
We know this is a lot, but we truly believe that you shouldn’t invest in anything that you don’t understand. So, if your bank approaches you about something which isn’t on this list, be sure you read about it before you buy in.
Managing the Risks of Cryptocurrency
To finish off this article, we do want to point out that while there are many risks to investing in cryptocurrency, there are risks in investing no matter how you invest. You could buy a property that gets his by a hurricane, or you could go all in on a company in the stock market that crashes—the point is, investing is never risk free but cryptocurrency is riskier than almost any other investment.
Thus, to balance the risk of investing in cryptocurrency, we remine you to diversify. Don’t go all in on one cryptocurrency, and ensure you maintain other types of investments. This is the best way to minimize your exposure to risk, though you will never delete it entirely.
Overall, we are excited that banks can now look into cryptocurrency and blockchain options, we just hope they are doing so in a manner that is sustainable long term. We urge anyone who reads this article to learn about anything they intend to invest in and to ensure they continue to diversify, no matter what financial options their banks offer.
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