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BOARD OF GOVERNORS

OF THE

FEDERAL RESERVE SYSTEM

WASHINGTON, D.C. 20551

DIVISION OF SUPERVISION 

AND REGULATION

DIVISION OF CONSUMER 

AND COMMUNITY AFFAIRS

SR 22-6 

CA 22-6

August 16, 2022 

TO THE OFFICER IN CHARGE OF SUPERVISION AND APPROPRIATE 

SUPERVISORY AND EXAMINATION STAFF AT EACH FEDERAL RESERVE BANK 

AND BANKING ORGANIZATIONS SUPERVISED BY THE FEDERAL RESERVE

SUBJECT: Engagement in Crypto-Asset-Related Activities by Federal ReserveSupervised Banking Organizations 

Applicability: This letter applies to all banking organizations supervised by the Federal 

Reserve, including those with $10 billion or less in consolidated assets.

The emerging crypto-asset1 sector presents potential opportunities to banking 

organizations, their customers, and the overall financial system; however, crypto-asset-related 

activities may pose risks related to safety and soundness, consumer protection, and financial 

stability, including, but not limited to: 

• Technology and operations: The technology underlying crypto-assets is nascent and 

evolving, and poses novel risks such as those associated with cybersecurity and 

governance of the underlying network and any related arrangements. These risks are 

particularly heightened when the underlying technology involves open, permissionless 

networks. 

• Anti-money laundering and countering of financing of terrorism: Crypto-assets can be 

used to facilitate money laundering and illicit financing. Some crypto-assets have limited 

transparency, making it difficult to identify and track ownership. 

• Consumer protection and legal compliance: Crypto-assets pose significant consumer 

risks such as those related to price volatility, misinformation, fraud, and theft or loss of 

assets. In addition, banking organizations engaging in crypto-asset-related activities face 

potential legal and consumer compliance risks stemming from a range of issues, 

including, for example, uncertainty regarding the legal status of many crypto-assets; 

1

 A crypto-asset generally refers to any digital asset implemented using cryptographic techniques. 
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potential legal exposure arising from consumer losses, operational failures, and 

relationships with crypto-asset service providers; and limited legal precedent regarding 

how crypto-assets would be treated in varying contexts, including, for example, in the 

event of loss or bankruptcy. 

• Financial stability: Certain types of crypto-assets, such as stablecoins, if adopted at large 

scale, could also pose risks to financial stability including potentially through 

destabilizing runs and disruptions in the payment systems.

2

 

Given the heightened and novel risks posed by crypto-assets, the Federal Reserve is closely 

monitoring related developments and banking organizations’ participation in crypto-asset-related 

activities. 

This letter provides that a Federal Reserve-supervised banking organization engaging or 

seeking to engage in crypto-asset-related activities should notify its lead supervisory point of 

contact at the Federal Reserve.

3

 As explained below, prior to engaging in any crypto-assetrelated activity, a supervised banking organization must ensure such activity is legally 

permissible and determine whether any filings are required under applicable federal or state laws. 

A supervised banking organization should, prior to engaging in these activities, have in place

adequate systems, risk management, and controls to conduct such activities in a safe and sound 

manner and consistent with all applicable laws, including applicable consumer protection statutes 

and regulations. 

Legal Permissibility

Prior to engaging in new activities of any kind, a supervised banking organization must

ensure that such activities are legally permissible.4 A supervised banking organization seeking 

to engage in (or currently engaged in) crypto-asset-related activities must analyze the

permissibility of such activities under relevant state and federal laws and determine whether any 

filings are required under federal banking laws, including the Bank Holding Company Act,5

Home Owners’ Loan Act,6 Federal Reserve Act,7 Federal Deposit Insurance Act,8 or the 

2

 President’s Working Group on Financial Markets, the Federal Deposit Insurance Corporation, and the Office of 

the Comptroller of Currency, Report on Stablecoins (November 2021), 

https://home.treasury.gov/system/files/136/StableCoinReport_Nov1_508.pdf. 

3

 Crypto-asset-related activities may include, but are not limited to, crypto-asset safekeeping and traditional custody 

services; ancillary custody services; facilitation of customer purchases and sales of crypto-assets; loans 

collateralized by crypto-assets; and issuance and distribution of stablecoins. 

4 This letter does not address the legal permissibility of any specific crypto-asset-related activity. 

5

 Bank holding companies should consult section 4 of the Bank Holding Company Act (12 U.S.C. § 1843) and 

Regulation Y (12 CFR part 225).

6

 Savings and loan holding companies should consult section 10(c) of the Home Owners’ Loan Act (12 U.S.C. 

§ 1467a(c)) and Regulation LL (12 CFR part 238). 

7

 12 U.S.C. § 330. State member banks also should consult state supervisory agencies regarding any required state 

filings. 

8

 Under section 24 of the Federal Deposit Insurance Act, an insured state bank may not engage as principal in any 

type of activity that is not permissible for a national bank, unless (i) the Federal Deposit Insurance Corporation

(FDIC) has determined that the activity would pose no significant risk to the Deposit Insurance Fund and (ii) the 
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regulations promulgated pursuant thereto, as applicable.9 If any supervised banking organization 

has questions regarding the permissibility of any crypto-asset-related activities or about the 

applicability of any filing requirements, it should consult its lead supervisory point of contact at 

the Federal Reserve. 

Notification of Proposed Activities

A supervised banking organization should notify its lead supervisory point of contact at 

the Federal Reserve prior to engaging in any crypto-asset-related activity. Any supervised 

banking organization that is already engaged in crypto-asset-related activities should notify its 

lead supervisory point of contact at the Federal Reserve promptly regarding the engagement in 

such activities, if it has not already done so. Federal Reserve supervisory staff will provide 

relevant supervisory feedback, as appropriate, in a timely manner. 

In all cases, a supervised banking organization should, prior to engaging in these 

activities, have in place adequate systems, risk management, and controls to conduct cryptoasset-related activities in a safe and sound manner and consistent with applicable laws, including 

applicable consumer protection statutes and regulations. This includes having adequate systems

in place to identify, measure, monitor, and control the risks associated with such activities on an 

ongoing basis. These systems should cover operational risk (for example, the risks of new, 

evolving technologies; the risk of hacking, fraud, and theft; and the risk of third-party 

relationships), financial risk, legal risk, compliance risk (including, but not limited to, 

compliance with the Bank Secrecy Act, anti-money laundering requirements, and sanctions 

requirements), and any other risk necessary to ensure the activities are conducted in a manner 

that is consistent with safe and sound banking and in compliance with applicable laws, including 

applicable consumer protection statutes and regulations. State member banks are also 

encouraged to notify their state regulator prior to engaging in any crypto-asset-related activity. 

Reserve Banks are asked to distribute this letter to the supervised banking organizations 

in their districts and to appropriate supervisory staff. In addition, a supervised banking 

organization may send questions via the Board’s public website.10

Michael S. Gibson

Director

Division of Supervision

and Regulation

Eric S. Belsky

Director

Division of Consumer and 

Community Affairs

state member bank is, and continues to be, in compliance with applicable capital standards prescribed by the Board 

(12 U.S.C. § 1831a(a)(1)). State member banks should consult the regulations and interpretations of the Office of 

the Comptroller of the Currency and FDIC to determine if activities are permissible under federal law.

9

 Among other such requirements, pursuant to section 208.3(d)(2) of the Board’s Regulation H, a state member 

bank may not, without the permission of the Board, cause or permit any change in the general character of its 

business or in the scope of the corporate powers it exercises at the time of its admission. 12 CFR 208.3(d)(2). See 

also SR Letter 02-09, “Guidance Regarding Significant Changes in the General Character of a State Member Bank’s 

Business and Compliance with Regulation H,” https://www.federalreserve.gov/boarddocs/srletters/2002/sr0209.htm; 

Frequently Asked Questions about Regulation H, 12 CFR 208.3–Q1, 

https://www.federalreserve.gov/supervisionreg/legalinterpretations/reg-h-frequently-asked-questions.htm. 

10 See https://www.federalreserve.gov/apps/contactus/feedback.aspx.
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