In a speech delivered Friday, FDIC Vice Chairman Michael J. Hsu stressed the need for clearer guidance on how banks should manage cryptocurrencies. His comments come on the heels of the FDIC's recent request for financial institutions to pause activities related to digital assets.
Hill's remarks follow a lawsuit filed by Coinbase in June, accusing the FDIC of attempting to sever ties between the banking sector and the crypto industry. Coinbase also sought access to the FDIC's "pause letters," issued to financial institutions between March 2022 and May 2023, advising them against expanding crypto-related activities without providing additional information.
The FDIC has faced criticism for its perceived hostility towards virtual asset players, with some industry players drawing comparisons to "Operation Chokepoint," a term used to describe past efforts to restrict banking services for certain sectors.
Hill Advocates for Innovation and Collaboration
Hill, who has served as Vice Chairman since 2022 and will assume the role of Acting Chairman on January 19, emphasized the need to reduce the pressure on banks to terminate account relationships due to fear of regulatory repercussions.
The FDIC Vice Chairman also called for increased coordination with the crypto industry and a regulatory regime that fosters innovation. He suggested that the FDIC should revitalize its innovation lab, enhance private sector engagement, and hire staff with expertise in emerging technologies to support banks' evolution while maintaining sound risk management practices.
January 2025, Cryptoniteuae