The US Government Accountability Office (GAO) has urged the Federal Deposit Insurance Corporation (FDIC) to develop an ongoing coordination mechanism with other federal agencies to address the risks associated with blockchain technology and its related financial products. In a letter made public on Monday, dated June 8, the GAO highlighted that regulators have struggled to oversee these products, which have grown substantially.
The GAO first identified blockchain technology risks as a priority concern in May of the previous year and placed it on its “High Risk List.” The watchdog stated that establishing a coordinated mechanism would enable regulators, including the FDIC, to collectively identify risks and implement timely regulatory responses.
Furthermore, the GAO recommended that the FDIC implement a rotation policy for case managers assigned to banks. This measure, the GAO found in 2024 was not in place, is intended to strengthen supervision and mitigate potential compromises to independence that could arise from long-term assignments.
The GAO also pointed to the 2023 collapses of Silicon Valley Bank, Silvergate Bank, and Signature Bank, all of which had significant exposure to the crypto industry, as raising questions about whether supervisory concerns were promptly addressed by bank watchdogs.