GAO urges FDIC to strengthen crypto oversight coordination

A federal watchdog has urged the Federal Deposit Insurance Corporation to strengthen its oversight of the banking sector's involvement with blockchain technology and to improve the independence of its supervisory staff. In a letter dated June 8 and made public on Monday, the U.S. Government Accountability Office called on the FDIC to establish a formal, ongoing coordination mechanism with other federal regulators to address risks from blockchain-based financial products.

The GAO stated that a 2023 review found financial regulators lacked such a coordination mechanism, and that blockchain-related financial services have grown substantially since. The watchdog argued that a joint framework would allow the FDIC and other agencies to collectively identify risks and implement regulatory responses more quickly. Blockchain technology remains on the GAO's High Risk List due to persistent oversight challenges.

This push for better interagency coordination comes as the FDIC's role in crypto oversight has expanded. Under the GENIUS Act passed last year, the FDIC is the primary regulator for stablecoin issuers that operate as subsidiaries of the banks it supervises. Separately, Senate...