The Federal Deposit Insurance Corporation (FDIC) is set to revise its guidelines, allowing U.S. banks to engage with cryptocurrency businesses without seeking prior regulatory permission.
Why Is the FDIC Changing Its Approach?
Acting Chairman Travis Hill revealed that the FDIC is reevaluating its stance on digital assets. The agency previously created a hostile environment for banks exploring blockchain and cryptocurrency. The FDIC released 175 documents detailing past interactions with banks regarding crypto activities. Lawmakers are investigating debanking practices, where services to crypto businesses were cut off without clear justification.
Past Restrictions and Legal Battles
Banks faced bureaucratic resistance when wanting to work with crypto firms. Delayed responses and 'pause letters' were common. Coinbase sued the FDIC, unveiling internal documents that confirmed the regulator's discouragement of banks supporting crypto businesses.
What Does This Mean for Crypto and Banking?
FDIC's revised policies may soon allow banks to offer crypto-related services without special approval, form partnerships with blockchain firms, and integrate digital assets into their financial products. The Senate addressed debanking, with Senator Elizabeth Warren acknowledging the issue and calling for action due to thousands of banking service denials related to crypto.
FDIC's policy revision opens up new opportunities for banks and crypto companies, facilitating collaboration and innovation in the financial sector.
