#FDIC Vice Chair Backs Cryptocurrencies#

FDIC Vice Chairman Travis Hill recently delivered a speech calling for the agency to take a more open approach to cryptocurrencies, criticizing the “bottleneck strategy” previously employed by federal agencies to restrict banks from expanding their crypto-related activities. Hill argued that this strategy stifled innovation and gave the impression that the FDIC was hindering the development of blockchain technology. He pointed out that federal agencies had previously used “cease and desist letters” to restrict banks from engaging in crypto-related activities, leading to banks closing accounts due to high fines for non-compliance. He called for an end to practices like “Operation Choke Point” and a reassessment of the implementation of the Bank Secrecy Act to reduce this phenomenon. Hill stated that he expects the FDIC to take a more “open-minded approach” to technology and called for more guidance on digital assets. His remarks came after some in the crypto industry expressed concerns that the FDIC had asked financial institutions to pause crypto-related activities. Hill’s speech suggests that the FDIC may be shifting its stance on cryptocurrencies and providing more support for the industry’s development.