The FDIC recently disclosed internal documents indicating its supervisory functions concerning banks embracing crypto services. These documents were revealed before a hearing focusing on the banking industry standard and financial inclusiveness concerning the FDIC’s approach to crypto projects.
Documents Reveal Delays and Regulatory Resistance in the Crypto Market
In particular, the released documents contain numerous exchanges showing the challenges faced by different banks in conforming with the FDIC. These institutions met substantial obstacles when establishing blockchain and cryptocurrency-related operations. For instance, the regulatory body showed opposition through its constant need for additional details and multiple delay periods. Some banks received explicit orders to delay or permanently halt their crypto market development, leading to substantial delays in advancing their initiatives.
Senator Lummis Calls for Change After The Crypto News
The FDIC earned praise from Senator Cynthia Lummis after it decided to share documents publicly. Lummis endorsed the decision to release supervisory procedures as she supports cryptocurrency assets. At the same time, she emphasized her concern regarding 'Chokepoint 2.0', referring to regulatory attempts to cut off banking options for crypto-related companies. US Senator Lummis stressed how government transparency is vital in regulatory practices involving blockchain technology and cryptocurrency.
Regulatory Revisions on the Horizon?
In response to concerns raised by these documents, the FDIC will evaluate its current approach to supervising crypto market activities. The agency aims to modify its regulatory approach to digital assets to achieve a fair balance. The FDIC will replace the criticized Financial Institution Letter (FIL) 16-2022 through this reassessment process. Additionally, the FDIC intends to work with multiple government agencies such as the President’s Working Group on Digital Asset Markets to create a regulatory framework.
The release of these documents has revealed current challenges and the necessity for reviewing regulatory measures concerning the crypto industry. Such developments could lead to a more balanced and transparent regulatory environment.
