Market Data 
- FDIC Vice Chair Travis Hill supports clearer crypto banking guidelines to balance innovation and regulatory compliance effectively.
- Hill criticized restrictive measures like pause letters and urged reforms to prevent stifling blockchain innovation.
- He emphasized the need for consistent crypto policies to support innovation while addressing risks in digital asset management.
Federal Deposit Insurance Corporation (FDIC) Vice Chair Travis Hill emphasized the need for clearer guidelines for cryptocurrency banking activities. He criticized past practices, including pause letters, which temporarily halted banks’ crypto-related operations. Hill argued these actions stifled innovation and gave the impression that the FDIC opposed blockchain technology.
Hill called for consistent regulations to support innovation while maintaining compliance with existing financial laws. He stressed the importance of fostering collaboration between banks and cryptocurrency companies.
Concerns Over Restrictive Policies
Hill highlighted the impact of restrictive practices. He compared them to Operation Choke Point, a 2013 initiative targeting high-risk industries. He warned that such measures harm the financial sector by discouraging legitimate crypto activities.
The FDIC issued pause letters between 2022 and 2023. It urges banks to delay expanding crypto-related operations. Hill criticized this approach, stating it created confusion and slowed technological advancements in the financial sector.
He also addressed the challenges of the Bank Secrecy Act (BSA), which penalizes banks for non-compliance. Hill said current policies incentivize banks to close accounts. This limits access to financial services.
Hill’s Vision for Fair Policies
Hill urged the FDIC to adopt transparent and consistent policies for handling digital assets. He emphasized the need for clear communication with banks regarding crypto-related activities. He criticized the SEC’s accounting rules, which classify customer-held crypto assets as liabilities on custodians’ balance sheets. Hill argued this approach differs from traditional asset handling and creates unnecessary regulatory burdens.
Hill pledged to promote an open-minded approach to blockchain technology as he prepares for a leadership role in the FDIC. He called for fair regulations to balance innovation and financial stability. This ensures banks can engage with the growing crypto industry.
Hill’s remarks highlight the importance of fostering innovation while addressing risks associated with digital assets. Clearer policies could strengthen the relationship between traditional banks and the crypto sector.
