According to Hill, agencies must describe what activities are permitted and how to carry them out.
The Republican believes that long commitments with regulators slow down innovation.
Travis Hill, current vice president of the Federal Deposit Insurance Corporation (FDIC), has recently expressed his support for cryptocurrencies. In a speech, Hill urged the agency to take a renewed approach to digital assets. Under the Trump administration, the Republican is expected to take over leadership of the FDIC, at least temporarily.
Hill stood out that the FDIC’s current approach has slowed innovation and fueled public perception that the agency is reluctant to get involved in crypto asset-related businesses. In his speech, he also mentioned the controversial evidence that came to light after a legal battle with Coinbase Inc., which indicate that, in 2022, the FDIC suspended or blocked banking activity related to cryptocurrencies in numerous US banks.
One of the letters shared as evidence revealed that the regulator had written to multiple banking institutions: “We respectfully ask that you suspend all activity related to cryptoassets… The FDIC will inform all banks as soon as supervision for activities related to cryptoassets is defined.” .
Travis said that, in his opinion, a much better approach is for agencies to clearly and transparently describe to the public What activities are legally permitted and how to carry them outin accordance with the respective safety standards. Furthermore, he highlighted that, if regulatory approvals are required, these must be managed in a timely manner, something that has not happened in recent years.
In the short term, I expect the FDIC to consider several measures. One of them is a change in supervision towards new technologies. For example, certain types of experimentation with new technologies should not require lengthy engagements with regulators or extensive approval processes.
Travis Hill, vice president of the FDIC.
Thus, the official highlighted that the FDIC has been contravening one of its main objectives: “The FDIC has had, over time, the goal of reducing the number of people without access to banking services.”
An issue closely related to government agencies’ approach to digital assets is that of “debanking.” In recent years, there have been several accounts of people and companies associated with the cryptocurrency industry losing access to bank accounts without explanation.
Efforts to unbank law-compliant customers are unacceptable. Regulators must work to put an end to this. There is no place at the FDIC for anyone who has explicitly or implicitly pressured banks to stop serving law-abiding customers.
Travis Hill, vice president of the FDIC.
Donald Trump’s inauguration is scheduled for January 20, which has raised high expectations in the cryptocurrency ecosystem due to his favorable policy promises. However, Greg Cipolaro, head of research at the firm New York Digital Investment Group (NYDIG), warns that regulatory changes could take time to materialize. Despite renewed hope for proposals that the incoming administration could implement, Cipolaro stresses that many appointments of key officials are still pending confirmation.
