The FDIC issued a notice of proposed rulemaking Thursday that would create a formal supervisory framework for insured depository institutions to custody digital assets on behalf of clients. The proposal eliminates the informal "pause letters" that have effectively blocked bank crypto custody since 2022.
Under the proposed rule, banks meeting specific operational, capital, and cybersecurity requirements could hold digital assets in segregated custody accounts without the 100% risk-weight capital charge that current Basel guidance imposes. The FDIC proposes a tiered approach: 20% risk weight for assets in cold storage with qualified custodians, 50% for warm wallet arrangements.