The Federal Deposit Insurance Corporation () has allowing banks it supervises to engage in bitcoin and crypto activities without seeking pre-approval. This reverses a controversial policy imposed under the Biden administration.

In a March 28 statement, the FDIC said banks can now participate in crypto-related services like custody and trading if they properly manage the risks. The agency will also work to replace old regulations with updated crypto guidance.

The policy change came in a new Financial Institution Letter that rescinds earlier rules from 2022 requiring banks to get FDIC clearance before handling bitcoin and crypto assets. That red tape frustrated the banking industry.

By removing this barrier, the enables its supervised banks to experiment with this emerging ecosystem more freely. However, specific permissions will still depend on interagency coordination.

Acting FDIC Chairman Travis Hill called the move “one of several steps” in laying out a new crypto-friendly approach focused on security. He said, “The FDIC is turning the page on the flawed approach of the past three years.” The agency expects to release additional guidance as it consults the Working Group on digital assets.

Major banks have recently launched bitcoin and crypto services despite unclear regulations. Providing regulatory clarity will allow more banks to participate.