Via electronic transmission

May 1, 2025

David Sacks
Special Advisor for Artificial Intelligence and Crypto
Chair, President’s Working Group on Digital Asset Markets
The White House
1600 Pennsylvania Avenue NW
Washington, D.C. 20500

Dear Mr. Sacks:

We write to thank you and the members of the President’s Working Group on Digital Asset Markets for the ongoing work to promote U.S. leadership on digital assets.¹ We appreciate the opportunity to provide further input for consideration. Our letter of February 20 focused on identifying the guidance, policies, and other documents issued by the federal banking agencies (the Federal Deposit Insurance Corporation, the Board of Governors of the Federal Reserve, and the Office of the Comptroller of the Currency) that “affect the digital asset sector,” specifically, banks’ ability to meaningfully engage in digital asset-related activity and otherwise support the digital asset sector. The purpose of that initial letter was to highlight banks’ concerns regarding that guidance as the PWG works to fulfill its responsibilities set forth in the President’s Executive Order on Digital Asset Markets.² We appreciate the important steps that each of the federal banking agencies has since taken consistent with the recommendations we made in our prior letter. We are now writing to highlight the remaining actions the federal banking agencies should take as outlined in that letter and to provide more detailed recommendations for the PWG’s consideration to help advance banks’ ability to engage in digital asset activities, which will, in turn, help elevate the United States’ leadership role in the digital asset ecosystem and promote American competitiveness.

The guidance that we highlighted in our prior letter stifled banks’ ability to engage in digital asset activities, and thus, placed the United States at a competitive disadvantage relative to non-U.S. firms that are not subject to similar, stringent requirements. The agencies helpfully rescinded or withdrew multiple problematic interpretive letters, statements, and other guidance documents over the past few weeks. These are significant actions that we appreciate, as they remove some of the barriers to banks’ ability to engage in digital asset activities. But additional steps are needed for the U.S. to achieve a leadership position in digital assets and financial technology—namely, greater clarity regarding banking organizations’ ability to engage in digital asset activities. Banks are an essential component of the financial and payments systems and are governed by a comprehensive regulatory framework designed to mitigate the risks inherent to financial activities. It is therefore critical that the federal banking agencies take further steps to facilitate banks’ engagement in digital asset activities. It is our hope that the PWG will incorporate the recommendations set forth below into its report to the President pursuant to Section 4(c) of the Executive Order and encourage the banking agencies to undertake the recommended actions set forth herein.

At a high level, we recommend that:

• The federal banking agencies should issue joint rules and guidance to promote clarity and consistency. To help advance the United States’ leadership position in the digital asset ecosystem, it is essential that the three federal banking agencies take the same approach regarding banks’ engagement with distributed ledger technology and digital asset activities, and the accompanying supervision of such activities. In the absence of joint guidance, the agencies should otherwise take steps to align their individual rules and guidance across the three agencies. Doing so will encourage innovation across the entire banking sector, irrespective of which agency is a bank’s primary federal regulator.
• The federal banking agencies should codify a technology-neutral approach to permissibility and issue specific permissibility guidance. The underlying technology wrapper applied to an asset does not change the asset, and this is especially true as to tokenizing real-world assets and liabilities. Indeed, FDIC Acting Chairman Hill recently acknowledged that the FDIC “should provide certainty that deposits are deposits, regardless of the technology or recordkeeping deployed.’”³ We agree. The banking agencies should (i) issue joint guidance confirming a technology-neutral approach to the legal permissibility of banks’ use of DLT to represent or otherwise interact with digital assets, and (ii) issue guidance on specific permissibility uncertainties that are currently hindering bank innovation.
• The federal banking agencies should clarify the risk management expectations for banks’ engagement in digital asset-related activities. The federal banking agencies have not provided public, uniform guidance regarding the risk management expectations for banks’ digital asset activities. Instead, they have required banks to consult with the agencies and, in some cases, obtain a non-objection, before proceeding with digital asset activities. To facilitate banks’ digital asset activities, the agencies should issue joint rules or guidance outlining the risk management expectations related thereto, including with respect to anti-money laundering and countering the financing of terrorism. The agencies should update those expectations periodically as banks begin to engage in more complex digital asset activities and develop expertise to manage the associated risks. Furthermore, the federal banking agencies should ensure that any capital standards – and any proposed revisions to liquidity standards – for exposure to public blockchain and related activities are based on robust empirical analysis regarding banks’ true risk exposure from those activities and informed by public comment.

1. A description of the Associations is contained in Appendix A. [↩]
2. Executive Order re: “Strengthening American Leadership in Digital Financial Technology” (Jan. 23, 2025). [↩]
3. Speech by FDIC Acting Chairman Travis Hill, “View from the FDIC: Update on Key Policy Issues,” at the American Bankers Association Washington Summit (April 8, 2025) (emphasis added) (link). [↩]