U.S. GAO Urges FDIC to Coordinate Oversight as Blockchain Finance Is Labeled High Risk

The U.S. Government Accountability Office (GAO) sent a letter on June 8 to Federal Deposit Insurance Corporation (FDIC) Chair Travis Hill, citing rapid growth in blockchain-related financial products and services and noting that blockchain technology has been placed on a high-risk list. According to ChainCatcher, the GAO recommended creating a coordination mechanism to help the FDIC and other regulators jointly identify risks and implement timely supervisory responses. The GAO also pointed to the GENIUS Act passed last year, under which the FDIC is the primary regulator for stablecoin-issuing subsidiaries owned by banks. In addition, the GAO recommended that the FDIC rotate case managers assigned to banks to reduce threats to supervisory independence. The letter referenced the 2023 failures of three banks tied to the crypto industry, which raised questions about whether regulators took sufficient action.