[Federal Register Volume 86, Number 97 (Friday, May 21, 2021)]
[Notices]
[Pages 27602-27603]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2021-10772]


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FEDERAL DEPOSIT INSURANCE CORPORATION

RIN 3064-ZA25


Request for Information and Comment on Digital Assets

AGENCY: Federal Deposit Insurance Corporation.

ACTION: Request for information and comment.

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SUMMARY: The Federal Deposit Insurance Corporation (FDIC) is gathering 
information and soliciting comments from interested parties regarding 
insured depository institutions' (IDIs') current and potential 
activities related to digital assets. The FDIC is interested in 
receiving input on current and potential digital asset use cases 
involving IDIs and their affiliates.

DATES: Comments must be received by July 16, 2021.

ADDRESSES: Commenters are encouraged to use the title ``Request for 
Information and Comment on Digital Assets (RIN 3064-ZA25)'' and to 
identify the number of the specific question(s) for comment to which 
they are responding. Please send comments by one method only directed 
to:
     Agency Website: https://www.fdic.gov/regulations/laws/federal/. Follow the instructions for submitting comments on the 
agency's website.
     Email: [email protected]. Include RIN 3064-ZA25 in the 
subject line of the message.
     Mail: James P. Sheesley, Assistant Executive Secretary, 
Attention: Comments-RIN 3064-ZA25, Federal Deposit Insurance 
Corporation, 550 17th Street NW, Washington, DC 20429.
     Hand Delivery/Courier: Comments may be hand-delivered to 
the guard station at the rear of the 550 17th Street NW building 
(located on F Street) on business days between 7:00 a.m. and 5:00 p.m., 
ET.
    Public Inspection: All comments received will be posted without 
change to https://www.fdic.gov/regulations/laws/federal/--including any 
personal information provided--for public inspection. Paper copies of 
public comments may be ordered from the FDIC Public Information Center, 
3501 North Fairfax Drive, Room E-1002, Arlington, VA 22226 or by 
telephone at (877) 275-3342 or (703) 562-2200.

FOR FURTHER INFORMATION CONTACT: Rae-Ann Miller, Senior Deputy 
Director, Supervisory Examinations and Policy, Division of Risk 
Management Supervision, (202) 898-3898, [email protected]; Jonathan 
Miller, Deputy Director, Division of Depositor and Consumer Protection, 
202-898-3587, [email protected]; or C. Chris Ledoux, Corporate Expert, 
Financial Innovation and Technology Group, Legal Division, 202-898-
3535, [email protected].

SUPPLEMENTARY INFORMATION:

Background Information

FDIC Overview

    The FDIC is an independent agency created by the Congress to 
maintain stability and public confidence in the nation's financial 
system. The FDIC works to maintain the strength of the U.S. financial 
sector through effective supervision of regulated financial 
institutions, consumer protection, the resolution of failed financial 
institutions, and the provision of deposit insurance.\1\ In its 
capacity as a federal banking regulator and deposit insurer, among 
other functions, the FDIC examines and supervises institutions' safe 
and sound operations and compliance with laws and regulations, 
evaluates resolution plans of large financial institutions, maintains 
the Deposit Insurance Fund (DIF), and resolves failed IDIs.\2\ 
Collectively, the FDIC's activities support a safe-and-sound banking 
sector and contribute to the stability of and public confidence in the 
U.S. financial system as a whole.
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    \1\ As of December 31, 2020, the FDIC insured 5,001 insured 
commercial banks and savings institutions. The FDIC is the primary 
federal regulator of state-chartered banks and savings associations 
that are not members of the Federal Reserve System. As of December 
31, 2020, the FDIC supervised approximately 3,221 banks and savings 
associations. The FDIC also has a back-up supervision and 
examination role with respect to insured depository institutions for 
which the Office of the Comptroller of the Currency and the Board of 
Governors of the Federal Reserve System are the primary federal 
regulators. See https://www.fdic.gov/bank/analytical/qbp/2020dec/.
    \2\ ``Insured depository institution'' means any bank or savings 
association the deposits of which are insured by the FDIC pursuant 
to the Federal Deposit Insurance Act (FDI Act). See 12 U.S.C. 
1813(c).
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    In addition to its individual responsibilities, the FDIC works 
cooperatively with its fellow state and federal banking regulators to 
strengthen the banking sector and the U.S. financial system, including 
through a number of interagency formal structures, joint rule making 
and examinations.

Current and Potential Digital Assets Use Cases

    One area of new technology and innovation surrounds the use of 
digital assets in financial markets and intermediation, as well as with 
settlement and payment systems. Banks are increasingly exploring 
several roles in the emerging digital asset ecosystem, such as being 
custodians, reserve holders, issuers, and exchange or redemption 
agents; performing node functions; and holding digital asset issuers' 
money deposits.
    Digital asset use cases and related activities may fall into one or 
more broad categories:
     Technology solutions, such as those involving closed and 
open payment systems, other token-based systems for banking activities 
other than payments (e.g., lending), and acting as nodes in networks 
(e.g., distributed ledgers).
     Asset-based activities, such as investments, collateral, 
margin lending and liquidity facilities.
     Liability-based activities, such as deposit services and 
where deposits serve as digital asset reserves.
     Custodial activities, such as providing digital asset 
safekeeping and related services, such as secondary lending, as well as 
acting as a qualified custodian on behalf of investment advisors.
     Other activity that does not align with the others above. 
Examples could include market-making and decentralized financing.

Request for Comment

    The FDIC recognizes that there are novel and unique considerations 
related to digital assets, and this RFI is intended to help inform the 
FDIC's understanding in this area. The FDIC is seeking input on current 
and potential use cases involving IDIs and their affiliates and

[[Page 27603]]

risk and compliance management in conducting such activities.
Questions Regarding Current and Potential Use Cases
    1. In addition to the broad categories of digital assets and 
related activities described above, are there any additional or 
alternative categories or subcategories that IDIs are engaged in or 
exploring?
    2. What, if any, activities or use cases related to digital assets 
are IDIs currently engaging in or considering? Please explain, 
including the nature and scope of the activity. More specifically:
    a. What, if any, types of specific products or services related to 
digital assets are IDIs currently offering or considering offering to 
consumers?
    b. To what extent are IDIs engaging in or considering engaging in 
activities or providing services related to digital assets that are 
custodial in nature, and what are the scope of those activities? To 
what extent are such IDIs engaging in or considering secondary lending?
    c. To what extent are IDIs engaging in or considering activities or 
providing services related to digital assets that have direct balance 
sheet impacts?
    d. To what extent are IDIs engaging in or considering activities 
related to digital assets for other purposes, such as to facilitate 
internal operations?
    3. In terms of the marketplace, where do IDIs see the greatest 
demand for digital asset-related services, and who are the largest 
drivers for such services?
Questions Regarding Risk and Compliance Management
    4. To what extent are IDIs' existing risk and compliance management 
frameworks designed to identify, measure, monitor, and control risks 
associated with the various digital asset use cases? Do some use cases 
more easily align with existing risk and compliance management 
frameworks compared to others? Do, or would, some use cases result in 
IDIs developing entirely new or materially different risk and 
compliance management frameworks?
    5. What unique or particular risks are challenging to measure, 
monitor, and control for the various digital asset use cases? What 
unique controls or processes are or could be implemented to address 
such risks?
    6. What unique benefits to operations do IDIs consider as they 
analyze various digital asset use cases?
    7. How are IDIs integrating, or how would IDIs integrate, 
operations related to digital assets with legacy banking systems?
    8. Please identify any potential benefits, and any unique risks, of 
particular digital asset product offerings or services to IDI 
customers.
    9. How are IDIs integrating these new technologies into their 
existing cybersecurity functions?
Questions Regarding Supervision and Activities
    10. Are there any unique aspects of digital asset activities that 
the FDIC should take into account from a supervisory perspective?
    11. Are there any areas in which the FDIC should clarify or expand 
existing supervisory guidance to address digital asset activities?
    12. In what ways, if any, does custody of digital assets differ 
from custody of traditional assets?
    13. FDIC's part 362 application procedures may apply to certain 
digital asset activities or investments.\3\ Is additional clarity 
needed? Would any changes to FDIC's regulations or the related 
application filing procedures be helpful in addressing uncertainty 
surrounding the permissibility of particular types of digital asset-
related activity, in order to support IDIs considering or engaging in 
such activities?
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    \3\ See 12 CFR part 362, subpart A.
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Questions Regarding Deposit Insurance and Resolution
    14. Are there any steps the FDIC should consider to ensure 
customers can distinguish between uninsured digital asset products on 
the one hand, and insured deposits on the other?
    15. Are there distinctions or similarities between fiat-backed 
stablecoins and stored value products where the underlying funds are 
held at IDIs and for which pass-through deposit insurance may be 
available?
    16. If the FDIC were to encounter any of the digital assets use 
cases in the resolution process or in a receivership capacity, what 
complexities might be encountered in valuing, marketing, transferring, 
operating, or resolving the digital asset activity? What actions should 
be considered to overcome the complexities?
Additional Considerations
    17. Comments are invited to address any other digital asset-related 
information stakeholders seek to bring to the FDIC's attention. 
Comments are also welcome about the digital asset-related activities of 
uninsured banks and nonbanks.

Federal Deposit Insurance Corporation.
    Dated at Washington, DC, on May 17, 2021.
James P. Sheesley,
Assistant Executive Secretary.
[FR Doc. 2021-10772 Filed 5-20-21; 8:45 am]
BILLING CODE 6714-01-P