FDIC Chair Acknowledges Role in “Debanking” Crypto Firms
Federal Deposit Insurance Corporation (FDIC) interim Chair Travis Hill recently addressed the agency’s involvement in the debanking of crypto firms during a speech in St. Louis.
Unacceptable Practices
- Hill highlighted the issue of crypto-related businesses losing access to banking services without explanation.
- He emphasized that such actions are incompatible with the FDIC’s mission to reduce the number of unbanked Americans.
Operation Chokepoint 2.0
Hill’s remarks shed light on what critics have dubbed “Operation Chokepoint 2.0,” a purported effort by the Biden administration to impede the growth of the US crypto industry.
No More “Pause” Letters
Hill criticized the FDIC’s cautious approach to crypto, citing it as a hindrance to innovation. He condemned the issuance of “pause” letters to banks instructing them to halt crypto-related activities.
Clear Guidance Needed
- Hill called for a reset of the agency’s digital asset strategy.
- He advocated for transparent guidance on permissible activities and safe conduct.
Regulatory Oversight and Compliance
- Hill discussed the broader implications of regulatory oversight on activities like staking and lending.
- He emphasized the need for timely approvals for activities meeting safety standards.
BSA Compliance Challenges
Hill addressed the challenges under the Bank Secrecy Act, noting that compliance issues often lead to account closures and exacerbate debanking problems.
Modernization and Collaboration
- Hill suggested modernizing FDIC policies to adapt to the evolving financial landscape.
- He expressed optimism in striking a better balance through collaboration with the fintech industry.
