GAO urges FDIC to strengthen blockchain oversight

The GAO urges the FDIC to collaborate with other agencies on blockchain risks, citing rapid growth and oversight gaps. It recommends a formal mechanism for joint risk identification and response.

The U.S. Government Accountability Office (GAO) has urged the Federal Deposit Insurance Corporation (FDIC) to enhance its collaboration with other federal agencies to address growing risks associated with blockchain technology. In a letter dated June 8, the GAO reiterated recommendations from 2023, emphasizing that blockchain is now on its "High Risk List" due to significant oversight and management challenges. The GAO highlighted the lack of a consistent interagency coordination framework for managing blockchain-related risks. The rapid expansion of blockchain-based financial products has made regulatory fragmentation more apparent. The GAO also referenced the GENIUS Act, which designates the FDIC as the primary regulator for stablecoin-issuing subsidiaries owned by banks, and suggested rotating case managers to maintain supervisory independence. Citing previous failures of banks linked to the crypto industry, the GAO stressed the need for improved oversight. It called for the creation of a formal mechanism to enable regulators to jointly identify and address risks in a timely manner.