FDIC faces GAO pressure over gaps in crypto oversight

The U.S. Government Accountability Office (GAO) has urged the Federal Deposit Insurance Corporation (FDIC) to coordinate more closely with other federal regulators on blockchain risks. 

The watchdog made its June 8 letter to FDIC Chairman Travis Hill public on June 15.

Meanwhile, the GAO said blockchain-related financial products and services have grown in recent years. It said regulators “lacked an ongoing coordination mechanism” for blockchain risks when it reviewed the issue in 2023. The office said such a process would help agencies identify risks and respond faster.

FDIC role grows under stablecoin law

The recommendation arrives as the FDIC’s crypto role grows under the GENIUS Act. As crypto.news reported in April, the FDIC proposed rules for stablecoin issuers operating through the banking system. The proposal covers reserves, redemption, capital, risk management, and custody standards.

Under that framework, reserve deposits backing stablecoins may qualify for deposit insurance if they sit inside insured banks. Stablecoin holders would not receive federal deposit protection. That difference keeps the FDIC at the center of a debate over how bank rules should apply to tokenized payment products.

In addition, the GAO also urged the FDIC to strengthen bank supervision. It said the 2023 bank failures raised questions about whether regulators acted quickly enough when institutions showed weak liquidity and risk management. Silicon Valley Bank, Signature Bank, and Silvergate Bank all became part of the wider debate over banking exposure to crypto and tech clients.

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

Broader crypto rulemaking continues

The GAO letter comes as Congress and federal agencies continue work on crypto rules. As previously reported, 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. Travis 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.

The letter frames crypto oversight as a coordination problem at a time when stablecoins, bank charters, and market structure bills are moving through Washington. The report lists blockchain risk oversight and bank supervision as the two areas needing timely attention from the FDIC.