The US FDIC says it will provide a pathway for institutions to engage in crypto- and blockchain-related activities.
The FDIC will be working with the new crypto-focussed Task Force in the US
Photo Credit: Pixabay/ Sergei Tokmakov
The US Federal Deposit Insurance Corporation (FDIC) on Wednesday released several documents related to the supervision of crypto related activities in the country. Acting FDIC chairman Travis Hill announced that the agency will review its previous approach towards US banks seeking to offer crypto services. Established in 1933, the FDIC regulates US financial institutions and protects consumer interests in the country. It is the latest of various crypto-related policy decisions announced in the US after the election of US President Donald Trump.
During a US Senate hearing, Hill presented a 790-page document featuring letters from the US banking sector, urging the regulator to ease restrictions on experimentation with crypto-related activities and services.
The acting chairman of the FDIC pointed out that 24 banks in the US had received ‘pause letters' from the FDIC, that directed them to halt their plans of offering crypto-related services to their clients. The agency, under its previous chairperson, Martin Gruenberg, had expressed concerns about the volatility of these crypto assets, calling them threats to financial stability.
“Requests from these banks were almost universally met with resistance, ranging from repeated requests for further information, to multi-month periods of silence as institutions waited for responses, to directives from supervisors to pause, suspend, or refrain from expanding all crypto- or blockchain-related activity," Hill said in a statement.
Hill has directed the agency to initiate a detailed review of all prior supervisory communications between the FDIC and US banks.
He also said that banks in the US ‘simply stopped trying' to explore the crypto space as a result of FDIC's directive to keep an arm's distance from Bitcoin and crypto overall.
US President Donald Trump appointed Hill as the interim chairperson of the FDIC last month. Gruenberg, Hill's predecessor, who had headed the FDIC since 2005, stepped down from his position on January 19. As per reports, Gruenberg played a crucial role in ensuring banks kept a safe distance from the crypto sector.
Last December, Gruenberg reportedly said that FDIC's directives for banks to pause crypto-related plans would not de-bank the sector. Instead, he said, the directives were based on the risk-related concerns that crypto assets pose owing to their largely unregulated and volatile status.
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