The FDIC is set to revise its guidelines, allowing banks to engage with cryptocurrency businesses without seeking prior approval.
Why Is the FDIC Changing Its Approach?
Acting Chairman Travis Hill revealed that the FDIC is reevaluating its stance on digital assets. Hill acknowledged that past policies created a hostile environment for banks exploring blockchain and cryptocurrency. The FDIC released 175 documents detailing past interactions with banks regarding crypto activities. Previous guidance forced banks to pause or halt crypto-related operations. Lawmakers are investigating debanking practices where financial institutions cut off services to crypto businesses without clear justification.
Past Restrictions and Legal Battles
For years, banks wanting to work with crypto firms faced bureaucratic resistance. The FDIC’s past communications show delayed responses and 'pause letters' urging institutions to stop engaging with crypto. Coinbase sued the FDIC, forcing the regulator to release internal documents that confirmed the agency's discouragement of banks supporting crypto businesses.
What Does This Mean for Crypto and Banking?
With the FDIC revising its policies, banks may soon offer crypto-related services without needing special approval, and form partnerships with blockchain firms without regulatory roadblocks. Hill emphasized that the FDIC’s new approach will balance innovation with regulatory safeguards. The Senate is also weighing in on the issue, with concerns over previous FDIC policies targeting crypto firms.
The FDIC's policy change promises to remove significant barriers for banks interested in adopting blockchain and crypto-based services, potentially transforming the financial industry landscape.
