FDIC faces GAO pressure over gaps in crypto oversight

The watchdog repeated a recommendation that the FDIC rotate certain case managers assigned to banks. The agency did not require periodic rotation, which could weaken independence and affect supervision outcomes, according to the GAO. Rotation rules could support evidence-based escalation decisions.

The letter arrives as Congress continues work on crypto rules. The Senate Banking Committee advanced the CLARITY Act in a 15 to 9 vote in May. The bill would divide digital assets across SEC and CFTC oversight and create a separate framework for payment stablecoins.

The FDIC has also changed its approach to bank crypto activity. In 2025, the agency said FDIC-supervised banks could engage in permitted crypto-related work without prior agency approval, if they manage the risks. Hill said the agency was “turning the page” on the past approach.

Lawmakers have questioned stablecoin issuers, bank charter reviews, customer identification rules, and whether crypto firms should face bank-like safeguards when their products resemble deposits.

For the FDIC, the request now sits beside its stablecoin rulemaking and its bank supervision duties. The GAO did not call for a ban on blockchain products. It asked for a standing process that lets agencies work together before risks spread across markets.