The Federal Deposit Insurance Corp. (FDIC) is set to come under the Trump administration soon. Senior Republican Travis Hill, while serving as the Deputy Chairman of the FDIC, has made several recommendations regarding cryptocurrency policies.
Request for Guidance on Crypto Assets
Hill is urging the U.S. banking regulator to provide new guidance on digital assets. He pointed out that the current individual assessment approach is inadequate for guiding banks’ relationships with cryptocurrency.
“This approach has stifled innovation and contributed to the public perception that the FDIC is closed to institutions interested in blockchain or distributed ledger technology.”
Furthermore, he highlighted the controversial letters obtained during the Freedom of Information Act struggle with Coinbase Inc. These letters confirmed that access to banks for cryptocurrencies and certain sectors was restricted.
Importance of Regulation and Approval Processes
Hill stated, “It would be a much better approach for agencies to clearly and transparently define legal activities permitted to the public and to explain how these should be conducted according to safety and soundness standards.” He also emphasized the need for timely regulatory approvals, which have been lacking in recent years.
Appointed as a Republican two years ago, Hill criticized the FDIC’s role in pushing banks away from cryptocurrency clients.
“The long-term goal of the FDIC should be to reduce the number of unbanked individuals. Efforts to drive regulated customers away from banks are unacceptable, and regulators must work to end this practice.”
Current Chairman Martin Gruenberg previously announced his departure from the position on January 19. With Gruenberg’s exit occurring just before the Trump administration begins, Deputy Chairman Travis Hill will temporarily assume the presidency.
This leadership change at the FDIC could be significant for the future of the cryptocurrency sector. Decisions made by the new administration may shape the position of digital assets within the banking system.
