FDIC Wants Transparency in Crypto Banking
The FDIC’s Vice Chairman, Travis Hill, is calling for clearer rules on how banks can work with cryptocurrency companies. He says the current approach, which has seen banks told to stop working with crypto firms, is not the best way forward. Hill points out that the FDIC sent “pause” letters to over 20 banks, a fact revealed through a Freedom of Information Act request by Coinbase. Coinbase’s Chief Legal Officer called this a coordinated effort to shut down crypto activity in the US.
Hill believes a more transparent approach is needed. He suggests that regulators should clearly state what’s allowed and how to do it safely, and that any necessary approvals should be processed quickly. This hasn’t been happening, he says.
The Problem of “Debanking”
Hill also criticized the practice of “debanking,” where banks shut down or freeze accounts of crypto firms without explanation. This, he argues, affects not only crypto businesses but also other groups who have faced similar issues in the past. He stressed that access to banking is fundamental to a modern economy. The practice of debanking has been compared to past actions against politically or religiously targeted groups.
The Bottom Line
In short, the FDIC’s Vice Chairman wants clearer, more transparent rules for crypto businesses and an end to the practice of arbitrarily closing bank accounts associated with the crypto industry. He believes this is crucial for the health of both the crypto sector and the broader economy.
