Gyrokinetic simulations of C-2-like field-reversed configuration (FRC) find that electrostatic driftwaves are locally stable in the core. The stabilization mechanisms include finite Larmor radius effects, magnetic well (negative grad-B), and fast electron short circuit effects. In the scrape-off layer (SOL), collisionless electrostatic drift-waves in the ion-to-electron-scale are destabilized by electron temperature gradients due to the resonance with locally barely trapped electrons. Collisions can suppress this instability, but a collisional drift-wave instability still exists at realistic pressure gradients. Simulation results are in qualitative agreement with C-2 FRC experiments. In particular, the lack of ion-scale instability in the core is not inconsistent with experimental measurements of a fluctuation spectrum showing a depression at ion-scales. The pressure gradient thresholds for the SOL instability from simulations are also consistent with the critical gradient behavior observed in experiments.