At least 136 banks insured by the Federal Deposit Insurance Corp. had ongoing or planned crypto-related activities in January.
Many of the banks have third-party arrangements that let the bank’s customers buy and sell crypto assets, the FDIC said in its latest Office of Inspector General report.
Banks also provide account deposit services, custody services and lending to crypto asset exchanges. Banks also sponsor debit cards and prepaid cards that provide customers with crypto asset rewards.
The report highlighted the need for supervision in the space, specifically citing the sudden outflow of crypto-related deposits at Silvergate Capital in La Jolla, Calif., and an investment by an FTX affiliate in Moonstone Bank.
“Banks’ interactions with crypto assets present risks for the FDIC in supervising banks and resolving failed institutions,” the report said.
“Banks must regularly assess the fluctuations in crypto asset values used as collateral,” the report added. “Further, the FDIC should maintain expertise in digital assets in order to manage bank resolutions for failed institutions.”