BDIC BULLETIN VOLUME 1 | ISSUE 1 Mar 2026

A Digital Asset Industry Publication

VOLUME 1 | ISSUE 1 | MARCH 2026 | PUBLISHED BY BLOCKCHAIN DEPOSIT INSURANCE CORPORATION

ABOUT THIS PUBLICATION

The BDIC Bulletin is a monthly industry publication produced by the Blockchain Deposit Insurance Corporation. It provides opinions on cryptocurrency markets, regulation, and the financial infrastructure required to secure the industry, but also sheds light on the personal side of the leaders shaping the new traditional finance. This publication is intended for financial institutions, asset managers, regulators, and technology leaders navigating the evolving digital asset economy, seeking educational insights and opinions from industry professionals. While the opinions of the contributing writers may not reflect those of the company, we appreciate their content and commitment to the ecosystem and to our mission to provide a secure mind for the adoption of digital assets through secure wallets.

IN THIS ISSUE

EDITOR’S NOTE

From the Desk of Jeffrey A. Glusman | CEO & Founder, Blockchain Deposit Insurance Corporation

What you are reading is not a newsletter. It is the first edition of the BDIC Bulletin — a monthly publication from Blockchain Deposit Insurance Corporation that will serve as an unfiltered voice on the digital asset industry for as long as there is a gap between the protection investors expect and the protection they actually have while also adding personal perspective along the way.

The timing of this issue is not coincidental. On March 11, 2026, FDIC Chairman Travis Hill closed the final theoretical path to federal deposit insurance for stablecoin holders. That ruling is the clearest signal yet that the regulatory framework for crypto is hardening around a simple reality: the protection gap is real, it is permanent, and the infrastructure to address it must come from within the industry. That is what BDIC is building and our timing is pristine.

The BDIC Bulletin will be published monthly. The April issue will focus on the digital asset landscape ahead of the congressional meetings later that month — we will have the analysis ready before those conversations happen, not after. Beginning in May, we will publish and distribute in print on the 1st of each month as well as in digital format. We already have requests for copies from a strategic partner focus group hosting a NYC event in April and a major banking forum hosted in Chicago come June. The publication has an audience before it has a second issue. We intend to keep it.

The BDIC Bulletin is one dimension of what BDIC is becoming as a multi dimensional company. This past week, our CMO and I held programming meetings with Beyond Media Group for the new BDIC Broadcast, our forthcoming televised roundtable series with power players across crypto, finance, and policy. Viewing details to follow for the weekly show, stay tuned! Additionally, our TikTok channel, BDIC Business, is also live and refining its presence as the crypto insurance search on that platform continues to grow.

To those of you receiving this: you are early. Whether that means year one or two of BDIC’s business life, this is the transition period. Paul, the BDIC team, and I are grateful you are here for it, thank you #BDICommunity.

Jeffrey A. Glusman, CEO and Founder — Blockchain Deposit Insurance Corporation

FEATURE ANALYSIS

Do Stablecoin Holders Have Deposit Insurance?

On March 11, 2026, the FDIC closed the final theoretical path to federal coverage. This is what the ruling means for institutions and retail holders alike.

The short answer: no. And as of March 11, 2026, that answer is permanent.

On March 11, 2026, FDIC Chairman Travis Hill addressed the American Bankers Association Washington Summit and announced a proposed rule change that eliminates the final theoretical path to federal deposit insurance for stablecoin holders. For the 716 million crypto users globally, this ruling formalizes a protection gap that has always existed but was previously ambiguous.

The GENIUS Act and What It Actually Covers

The GENIUS Act is U.S. federal legislation establishing prudential requirements for payment stablecoin issuers. The Act explicitly states that payment stablecoins are not ‘subject to deposit insurance’ and prohibits issuers from marketing their products as federally insured. The Act mandates 1:1 reserve backing in high-quality liquid assets — meaningful protection against issuer insolvency, but not against the broader risk spectrum stablecoin holders face.

The Pass-Through Loophole Is Now Closed

Pass-through deposit insurance allows third-party deposits placed at a bank on behalf of end-customers to be insured as if each customer had made the deposit directly. The theoretical question was whether a stablecoin issuer depositing reserves at an FDIC-insured bank could extend that insurance to individual holders — potentially up to $250,000 per bank.

Chairman Hill’s proposed rule definitively closes this. The FDIC’s position: treating stablecoin holders as insured depositors is inconsistent with the GENIUS Act’s explicit prohibition. The rule resolves the ambiguity before a bank failure forces a contested interpretation.

The FDIC ruling does not create new risk. It clarifies existing risk.

What the Federal Framework Does Not Cover

The 1:1 reserve requirement addresses one scenario: the stablecoin issuer becomes insolvent and cannot redeem at par. The following risks remain entirely unaddressed by any federal framework:

• Depeg events triggered by market conditions or loss of confidence.

• Custodial failures at the bank or institution holding the issuer’s reserves.

• Smart contract exploits targeting the stablecoin protocol or its underlying infrastructure.

• Protocol-level errors in automated reserve management or redemption systems.

The Market Implication

Consider the scale: 716 million people globally hold cryptocurrency as of 2026, with stablecoins representing a significant and growing share of those holdings. According to the Chainalysis 2026 Crypto Crime Report, $17 billion was stolen from crypto users in 2025 alone. Less than 2% of crypto assets are currently insured by any mechanism.

For retail holders, this is a disclosure and awareness issue. For institutional holders — DAOs, hedge funds, corporate treasuries, family offices — it is a risk management issue that requires a formal response.

Decentralized insurance frameworks are emerging to address risks that federal frameworks do not cover. Insurance models designed specifically for stablecoin exposure — covering depeg events, custodial failures, and protocol exploits — are now available to institutional holders. BDIC’s StableCover Pro is one such model, with claims processed via smart contract upon verification. The architecture mirrors the automation and transparency that characterizes the stablecoin infrastructure it is designed to protect.

The Bottom Line

The FDIC just drew a clear line around what federal frameworks will and will not cover. The infrastructure to address the gap exists. The question for institutions is whether they respond before the next exploit, depeg, or custodial failure makes the exposure visible.

RESEARCH SPOTLIGHT

Who Do Crypto Users Actually Trust?

Wharton’s Consumer Cryptocurrency Confidence Report 2025 reveals a trust hierarchy the industry has largely ignored.

The Research

The Consumer Cryptocurrency Confidence Report 2025, published by the Wharton School of the University of Pennsylvania and Ludwig Maximilian University of Munich, draws on longitudinal data from approximately 42,000 U.S. respondents across 14 months. The c3i (Consumer Cryptocurrency Confidence Index) is now in its third year of continuous data collection.

The Trust Hierarchy

Respondents were asked directly: who do you trust for cryptocurrency guidance? The results cut against the industry’s dominant marketing assumptions.

• Researchers and academics ranked highest at 4.83 out of 7.

• Finance industry leaders ranked second at 4.51 out of 7.

• Celebrities, politicians, and professional athletes ranked at the bottom, all below 2.50.

Consumers are not anti-institution. They are pro-accountability.

The data confirms what the crypto industry’s loss figures already suggest: celebrity-driven marketing and political adjacency strategies are misaligned with what crypto users actually want. They want professional, credentialed, accountable authority — the same infrastructure that traditional finance provides.

The Structural Implication

The report also identified a notable paradox: while politicians rank among the least trusted sources of crypto guidance, the same respondents believe the U.S. president has significant influence over crypto prices — a pattern that held across all 14 months of data collection. Crypto owners rated this influence higher than non-owners.

The implication is significant: consumers understand that centralized forces shape decentralized markets. They are holding assets with structural vulnerabilities — and they know it. Less than 2% of those assets are currently insured.

Trust in central regulatory institutions like the SEC and Federal Reserve was not uniformly low among crypto holders. At multiple points in the data series, crypto owners showed higher institutional trust than non-owners. The researchers interpret this as growing acceptance of regulatory engagement as the asset class matures.

What This Means for Insurance Positioning

The FDIC established trust in bank deposits not through marketing but through structural protection that bank customers could rely on regardless of individual bank behavior. BDIC was designed on the same principle: protection that does not depend on trusting a particular exchange, issuer, or protocol.

BDIC Bulletin exists within this framework, a publication from an institution, written to the standards that researchers and finance professionals expect.

Source: Fritze, M. P., Lamberton, C., Reibstein, D., & Zhang, J. (2026). Consumer Cryptocurrency Confidence Report 2025: Crypto Volatility. Wharton School, University of Pennsylvania. | $17B figure: Chainalysis 2026 Crypto Crime Report.

CRYPTO RISK EXPLAINER

Three Terms Every Digital Asset Holder Should Understand

This section defines key risk concepts in plain language. Each term represents a category of loss that federal insurance frameworks do not address.

Stablecoin De-Peg

A de-peg occurs when a stablecoin trades below its intended 1:1 value against its reference currency. De-pegs are triggered by market panic, reserve management failures, or loss of market confidence — not necessarily by issuer insolvency. The GENIUS Act’s reserve requirements do not prevent de-pegs. During the 2022 UST collapse, holders lost funds in hours despite the issuer’s initial reserve position.

Smart Contract Exploit

A smart contract exploit is an attack that takes advantage of a flaw in the code governing a DeFi protocol, bridge, or stablecoin system. Exploits can drain protocol reserves or freeze user funds without any action by the user. These are not hacks in the traditional sense — there is no human error to prevent them after deployment. In 2025, bridge exploits alone accounted for a significant portion of the $17B in total crypto losses recorded by Chainalysis.

Self-Custody Risk

Self-custody means holding digital assets in a wallet where only the holder controls the private keys — no exchange or intermediary can access the funds. This is often described as the safest approach. It eliminates counterparty risk but does not eliminate the holder’s own risk: lost or stolen private keys, hardware failures, phishing attacks, and physical theft all result in permanent, unrecoverable loss. Self-custody security and financial insurance address different problems. The first is about access. The second is about recovery.

Custodial Failure

A custodial failure occurs when a third party holding assets on behalf of clients — an exchange, a custody provider, or a stablecoin reserve bank — fails to return those assets. Exchange failures (FTX, Celsius, Voyager) are the most documented form. Custodial risk also extends to banks holding stablecoin reserves, as Chairman Hill’s March 2026 ruling makes clear. FDIC insurance does not extend to the stablecoin holder in this chain.

MARKET INTELLIGENCE

March 2026 Developments Relevant to Digital Asset Risk

GEOPOLITICAL RISK 700% Surge in Nobitex Outflows Following Regional Airstrikes

Nobitex experienced a 700% surge in withdrawals following regional airstrikes in March 2026, illustrating how geopolitical events can rapidly translate into custodial liquidity risk for centralized exchanges. The episode is a documented case of non-technical risk — no hack, no exploit — materializing as exchange-level exposure for retail and institutional holders.

CYBERSECURITY New Social Engineering Attack Targeting Crypto Professionals

Threat actors posing as venture capital investors are distributing malicious links via fraudulent ‘investor meeting’ requests. Wallets are drained without exchange-level access. The attack vector is social and targets security-aware professionals. Standard exchange-level security controls do not address this exposure.

MARKET VOLATILITY BTC Liquidations During Iran-Israel Escalation

Bitcoin declined to $63,000 during the Iran-Israel escalation, triggering $350 million in liquidations within hours. Bitcoin’s correlation with risk assets in geopolitical stress events continues to diverge from its gold-analog narrative. Volatility is structural. Loss recovery without insurance is not.

INSTITUTIONAL ADOPTION Morgan Stanley Files for OCC Charter for Crypto Custody

Morgan Stanley has applied for an OCC national banking charter to offer crypto custody, trading, and staking under a single regulated structure. This is infrastructure-level institutional commitment — not speculative exposure. The outstanding question for all institutional custodians: who insures the assets held in custody? Banks have FDIC. Crypto custody does not.

REGULATION SEC and CFTC Submit Joint Crypto Oversight Framework to White House

The SEC and CFTC submitted coordinated crypto oversight proposals to the White House in March 2026 — the most significant joint regulatory action under the current administration. Clearer rules are coming. The protection gap exists now, before those rules take effect.

CYBERSECURITY AI-Era USB Malware Targets Crypto Holders at Root Level

USB devices pre-loaded with AI software marketed as crypto tools are executing with root-level system access and draining wallets in the background. This is traditional USB malware rebuilt for the AI tool era. The threat is active, broadly distributed, and targets everyday holders who would not be flagged by exchange security systems.

INSTITUTIONAL PERSPECTIVE

How Banks, Hedge Funds, and Asset Managers Are Approaching Digital Asset Risk in 2026

Based on publicly observable developments across banks, hedge funds, and asset managers, three patterns are emerging in how the industry is approaching digital asset risk in 2026.

Pattern 1: Infrastructure Before Position

Sophisticated institutions are building custody, compliance, and risk infrastructure before scaling position size. Morgan Stanley’s OCC charter application is the clearest recent signal: the bank is not speculating on price appreciation. It is building the regulated structure required to hold digital assets responsibly at scale. Risk management follows the same logic — insurance and coverage frameworks are infrastructure decisions, not optional overlays.

Pattern 2: Regulatory Engagement as Risk Mitigation

The Wharton c3i data shows that crypto-owning institutions demonstrate higher trust in the SEC and Federal Reserve than non-owners. This is consistent with what institutional risk teams are doing in practice: engaging with regulators proactively rather than avoiding scrutiny. The joint SEC-CFTC framework submission to the White House in March 2026 is the regulatory counterpart to this posture — coordinated, structured, and directed toward enforceable standards.

Pattern 3: Stablecoin Reserve Risk Is Now a Board-Level Issue

Chairman Hill’s proposed FDIC rule on pass-through insurance is not primarily a retail story. Institutional treasury teams, DAOs, and corporate stablecoin reserve managers now have formal regulatory confirmation that their stablecoin reserves are not federally insured under any mechanism. This is a board-level disclosure and risk management question. The institutional frameworks to address it are still in their early stages. The regulatory clarity now exists to require them.

Less than 2% of crypto assets are insured. That is not a retail problem. It is a systemic one.

BDIC CONVERSATIONS

BDIC Conversations (Broadcast Series)

A Blockchain Industry Roundtable, Launching Q2 2026

BDIC Conversations is a forthcoming broadcast series exploring digital asset risk, regulatory development, and the financial infrastructure required to protect crypto holders and institutions. Each episode will bring together practitioners, regulators, and researchers whose work is shaping the digital asset risk environment.

Planned Guest Categories

• Former regulators and policy architects from FDIC, SEC, and CFTC

• Institutional asset managers with active digital asset mandates

• Stablecoin issuers and reserve managers

• Blockchain infrastructure and cybersecurity researchers

• Legal and compliance practitioners in the digital asset space

Launching Q2 2026. Distribution via BDIC Bulletin and BDICinsurance.com.

BDIC Bulletin is published monthly by Blockchain Deposit Insurance Corporation and distributed via the BDIC subscriber network. Volume 1, Issue 1, March 2026. BDICinsurance.com

BDIC BULLETIN VOLUME 1 | ISSUE 1 Mar 2026 was originally published in Coinmonks on Medium, where people are continuing the conversation by highlighting and responding to this story.