FDIC Prepares Guidance for Tokenized Deposit Insurance
The Federal Deposit Insurance Corp. (FDIC) is drafting new guidelines to clarify how deposit insurance applies to blockchain-based banking systems. Acting Chair Travis Hill confirmed the initiative during a Federal Reserve Bank of Philadelphia conference, emphasizing that deposits should retain their legal status even when tokenized.
Tokenized deposits—digital representations of bank-held funds—differ from stablecoins, which lack automatic FDIC coverage. Hill's stance signals regulatory recognition of blockchain's role in traditional finance, addressing industry demands for clearer rules as banks experiment with distributed ledger technology.
Fintech firms currently bypass insurance limitations through partnerships with FDIC-backed banks. The forthcoming guidance could reshape how financial institutions bridge decentralized and legacy systems while maintaining consumer protections.
