Travis Hill, the Vice Chairman and potential interim leader of the US Federal Deposit Insurance Corporation (FDIC), has called for reforms that will make it easier for the US banking system to embrace cryptocurrencies.
As Hill prepares to assume leadership following the departure of current Chairman Martin Gruenberg on January 19, he has laid out a vision for a more transparent and innovation-friendly regulatory framework for digital assets.
Hill, a Republican, is considered a candidate to be the permanent chair of the FDIC under President-elect Donald Trump. In a statement, Hill criticized the FDIC’s current case-by-case approach to overseeing banks’ cryptocurrency-related activities, arguing that it stifles innovation and creates the perception that the agency is hostile to blockchain technology.
“This has stifled innovation and contributed to the public perception that the FDIC is closed to business if institutions are interested in anything related to blockchain or distributed ledger technology,” Hill said. Hill referred to the controversial “pause” letters unsealed through a Freedom of Information Act dispute with Coinbase, which he said have discouraged banks from exploring digital asset services.
Hill advocated for clear and transparent guidance for banks on permissible cryptocurrency activities, as well as timely regulatory approvals. “A much better approach would have been, and continues to be, for institutions to clearly and transparently explain to the public what activities are legally permissible and how they will be conducted in accordance with security and soundness standards,” Hill said.
The vice chairman also criticized the agency’s role in pressuring banks to cut ties with crypto customers, calling such actions unacceptable. “A longstanding goal of the FDIC has been to reduce the number of unbanked people. Efforts to leave law-abiding customers unbanked are unacceptable. Regulators must work to end this, and anyone who explicitly or implicitly pressures banks to stop serving law-abiding customers has no place on the FDIC,” he said.
*This is not investment advice.
