BPI and CBA Respond to FDIC Request for Information on Digital Activities of Banks

Dear Mr Sheesley:

The Bank Policy Institute[1] and the Consumer Bankers Association[2] (together, the “Associations”) appreciate the opportunity to comment on the request for information[3] issued by the Federal Deposit Insurance Corporation seeking input regarding insured depository institutions’ current and potential activities related to digital assets. Banks[4] have traditionally been at the forefront of technological innovation, and as more use cases emerge for digital assets,[5] 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.

To read the full comment letter, click here, or click on the download button below.

[1] The Bank Policy Institute 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.

[2] The Consumer Bankers Association partners with the nation’s leading retail banks to promote sound policy, prepare the next generation of bankers, and finance the dreams of consumers and small businesses. The nation’s largest financial institutions, as well as many regional banks, are CBA corporate members, collectively holding two thirds of the industry’s total assets.

[3] Request for information and Comment on Digital Assets, 86 Fed. Reg. 27,602 (May 21, 2021).

[4] For purposes of the comment letter, the term “banks” refers to, as the context may require, financial institutions including banks, bank holding companies or the affiliates of such banks and bank holding companies, that are regulated and supervised by the FDIC, the Office of the Comptroller of the Currency (“OCC”) and/or Federal Reserve Board(“Federal Reserve”).

[5] For the purposes of providing a working definition for this letter only, we use the term “digital assets” to refer to cryptocurrency and other products that employ distributed ledger technologies. The Securities and Exchange Commission has defined a “digital asset” to refer “to an asset that is issued and/or transferred using distributed ledger technology or blockchain technology…including, but not limited to, so-called ‘virtual currencies,’ ‘coins,’ and ‘tokens.'” Custody of Digital Asset Securities by Special Purpose Broker Dealers, 86 Fed. reg. 11,627 (Feb. 26, 2021).