ChainCatcher reported that the U.S. Government Accountability Office, or U.S. GAO, sent a letter on June 8 to Federal Deposit Insurance Corporation Chair Travis Hill. The letter focused on supervisory arrangements following the significant growth of blockchain-related financial products and services. According to the letter, blockchain technology has been placed on the high-risk list, creating a need for clearer coordination among regulators responsible for identifying risks and delivering timely supervisory responses.
Coordination After the Growth of Blockchain Financial Services
In the letter, the U.S. GAO stated that blockchain-related financial products and services have grown substantially. In response, it recommended the creation of a coordination mechanism designed to help the FDIC and other regulators jointly identify risks and implement regulatory responses in a timely manner. The recommendation centers on shared risk identification and coordinated action rather than treating blockchain-related risk management as a task handled by a single agency in isolation.
Stablecoin Oversight Under the GENIUS Act
The letter also referred to the GENIUS Act passed last year. Under that act, the FDIC is the primary regulator of a stablecoin issuer subsidiary under a bank it supervises. This places the FDIC in a direct oversight role for bank-affiliated stablecoin issuance activities and connects the agency’s duties to the GAO’s broader recommendations on risk identification, supervisory coordination and regulatory response.
Beyond the proposed coordination mechanism, the U.S. GAO also recommended that the FDIC rotate case managers assigned to banks in order to reduce threats to independence. The recommendation comes after the collapse of three banks connected to the crypto industry in 2023, which raised questions over whether regulators had taken sufficient action. The letter continues the review of bank supervision, blockchain-related financial services and oversight arrangements for stablecoin issuers operating through bank-related structures.