• Tone: The tone is notably pragmatic and enabling. The accompanying press release quotes Acting Chairman Travis Hill as saying the FDIC is “turning the page on the flawed approach of the past three years.” This signals a desire to provide a clearer path for banks to engage in crypto/blockchain activities under safety-and-soundness standards. Additionally, following on the heels of the FIL in March, Congress generated additional tailwind on the topic by signing the GENIUS Act into law. While the details of the GENIUS Act aren’t being discussed in this release, the Act generally defines and regulates stablecoins that are used for payments or settlements. At the time the Act was signed into law, whitehouse.gov described the Act by saying, “This long-overdue legislation creates the first-ever Federal regulatory system for stablecoins, ensuring their stability and trust through strong reserve requirements.” The Act goes a long way to promote more widespread use of stablecoins throughout the economic system while providing regulatory guardrails that a community bank must be familiar with when considering a crypto-friendly business model. With the apparent change in tone at the regulatory level, the question we hear most frequently is “How are community banks getting involved with crypto-assets in practice?” While the short answer is that not many are, there are a few emerging topics that community banks may want to consider if they want to start preparing for a crypto-friendly environment for their customers. Although the industry is still in its infancy with crypto-assets, there have been a few potential use cases at larger players like JPMorgan and Bank of America that have shown potential to possibly “trickle down” to the community banking space: • Custody Services: Offering custody services for your customers’ crypto-assets may align with some banks’ current Trust Services or Wealth Management divisions. In the early stages, a streamlined approach to this type of service may involve a mutual partnership with a third-party service where the bank acts as the custodian for the asset broker. This approach may be appealing to banks hoping to attract or retain younger customers who already hold crypto-assets but are unsure about the safety or security of the parties safeguarding those assets. • Stablecoin Reserves: Many crypto exchanges and fintech firms (River, for example) attract customers to their platform by holding client assets in full reserve, meaning that for every dollar invested in crypto-assets, they hold a dollar in a cash reserve with a qualified institution. This provides an opportunity for banks to be that institutional partner. With the passing of the GENIUS Act, we expect to see particular interest in stablecoin activity over the coming years. • Crypto-Backed Lending: As crypto-assets continue to become a larger part of consumers’ asset portfolios, customers may have an increased need to convert those less liquid assets into spendable dollars. While lending against direct crypto-asset holdings, such as bitcoin, is likely to be well outside the risk tolerance of most community banks, other crypto-related assets, such as publicly traded crypto-ETFs, may be a viable source of loan collateral; however, robust risk mitigation policies would need to be developed and implemented to ensure the safety and soundness of the activities. Any time a bank is venturing into uncharted territory, a slow, methodical approach is critical. The following are a few actionable insights to help a community bank explore crypto-related activities consistent with FIL-7-2025: • Start with activities that have clearer supervisory lineage. Consider crypto custody, stablecoin reserve services or participation in permissioned networks/INVN for payments — areas referenced by bank regulators and consistent with FIL-7-2025’s framing of potentially permissible activities. These business models also relate directly to the more robust guidance published by the OCC in interpretive letters 1170, 1172 and 1174. • Treat crypto like any other new product — build the risk stack first. Before launch, document product-level risk assessments covering market/price volatility, liquidity risk, operational resilience and cybersecurity, BSA/AML and sanctions, consumer disclosures and third-party/vendor risks. Align with your existing Part 364 safety-and-soundness standards and risk appetite statements. • Clarify permissibility for your charter and structure. “Permissible” is not blanket approval. Confirm legal authority under state law (for state non-member banks) and Part 362, where applicable; map each proposed activity to legal authority and supervisory expectations. Keep board minutes and counsel memos current. • Engage your supervisory team proactively. FIL-7-2025 removes prior approval, not supervisory dialogue. However, a diligent product rollout will always require sharing your program design, controls, KPIs/KRIs and issues-management plan with your exam team. This preserves transparency and mitigates surprises during exams. Details of the plan NEBRASKA INDEPENDENT BANKER 13
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