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News

FDIC Vice Chairman Urges Banks to Move Toward Crypto

January 11, 2025 - Around 2 mins mins to read

Key Points:

  • FDIC Vice Chairman Travis Hill urges clearer guidelines for banks on managing crypto.
  • Hill calls for a more flexible approach to banking and technology, emphasizing the need for better collaboration with the crypto industry.
Travis Hill, the Vice Chairman of the U.S. Federal Deposit Insurance Corporation, pressed for greater transparency and clarity in the regulation of cryptocurrencies.
FDIC Vice Chairman Urges Banks to Move Toward Crypto

Read more: Federal Deposit Insurance Corporation Sparks Controversy Over Crypto Influence Fears

FDIC Vice Chairman Calls for Clearer Guidelines on Crypto Regulation

In a speech delivered Friday, the FDIC Vice Chairman stressed the need for clearer guidance on how banks should manage cryptocurrencies. His comments come after the FDIC’s recent request for financial institutions to pause activities related to digital assets.

The remarks by Hill, an Obama-era appointee, came after a lawsuit filed in June by Coinbase accusing the FDIC of attempting to cut ties between the banking sector and the crypto industry. The firm also sought access to FDIC’s “pause letters,” issued to financial institutions between March 2022 and May 2023, advising them against expanding crypto-related activities without providing additional information.

The FDIC has been criticized as hostile toward virtual asset players, with some industry players terming it “Operation Chokepoint,” a term used to describe efforts to restrict banking services for certain sectors.

Hill Advocates for Innovation and Collaboration in Banking

Hill, who has served as Vice Chairman since 2022 and assumes the role of Acting Chairman on January 19, said the goal should be to reduce the pressure on banks to terminate account relationships based on fear of regulatory reprisal.

The FDIC Vice Chairman also spoke for increased coordination with the crypto industry and more space for the regulatory regime to nurture innovation. He suggested that the FDIC should reinvigorate its innovation lab, engage more with the private sector, and hire staff with expertise in emerging technologies to support banks’ evolution while ensuring sound risk management.

DISCLAIMER: The information on this website is provided as general market commentary and does not constitute investment advice. We encourage you to do your own research before investing.

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Harold

<p>With a passion for untangling the complexities of the financial world, I’ve spent over four years in financial journalism, covering everything from traditional equities to the cutting edge of venture capital. “The financial markets are a fascinating puzzle,” I often say, “and I love helping people make sense of them.” That’s what drives me to bring clear and insightful financial journalism to the readers of Coincu.</p>