U.S. FDIC Chair: Banks should serve the crypto industry
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U.S. FDIC Chair: Banks should serve the crypto industry
If the Federal Deposit Insurance Corporation adheres to Romero's position, it would mark a significant policy reversal.
Navigating Web3 tides with focused insightsSource: beincrypto
Compiled by: Blockchain Knight
Interactions between U.S. financial institutions and digital asset companies may soon improve under the proposed leadership of the Federal Deposit Insurance Corporation (FDIC). This shift could also promote growth and adoption within the crypto asset industry.
Christy Goldsmith Romero, FDIC chair nominee, suggested that banks should be allowed to serve digital asset firms.
Romero made the remarks while responding to Senator Cynthia Lummis’s question about whether financial institutions should provide services to crypto asset companies.
Romero stated: "I don't believe it is the FDIC's role to tell banks which industries or companies they should serve."
Coinbase Chief Policy Officer Faryar Shirzad also highlighted the significance of Romero’s statement, referencing the impact of "Operation Chokepoint 2.0" on the crypto asset industry.
Shirzad added: "Unless the White House rescinds its crackdown directive and the nominee commits to reversing the current pressures facing the digital asset sector, the situation will not change."
He further noted: "Bank regulators now claim they are not targeting the crypto industry for de-banking; banks can currently freely onboard crypto asset companies, subject only to normal internal risk management reviews."
Meanwhile, if the FDIC maintains Romero’s stance, it would mark a significant policy reversal.
Earlier this year, the FDIC, along with the Federal Reserve and the Office of the Comptroller of the Currency, issued a notice on the risks posed by crypto assets to banking institutions. They stated that business models centered on crypto asset activities pose significant threats to the safety and soundness of the banking system.
They further added: "Issuing or holding crypto assets issued, stored, or transferred on decentralized networks or similar systems is unlikely to align with safe and sound banking practices."
Due to this stance, many banks have restricted or terminated services for crypto asset users.
Recently, Erik Voorhees, founder of the crypto exchange Shapeshift, complained on social media that fintech firm Revolut closed his account due to his involvement in crypto transactions.
However, crypto asset firms are pushing back against these restrictions.
Last month, Coinbase filed a lawsuit against the FDIC and the U.S. Securities and Exchange Commission (SEC), seeking documents related to crypto regulation.
Similarly, the Bank Policy Institute (BPI) has voiced support for repealing SEC Staff Accounting Bulletin No. 121 (SAB 121), which prohibits banks from offering crypto custody services.
BPI stated: "Restricting banks’ ability to offer these services leaves customers with little well-regulated protection for their digital asset portfolios and ultimately exposes them to greater risk."
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