U.S. FDIC Chairman: Banks should provide services to the Crypto industry

Source: Blockchain Knight

Under the proposed Federal Deposit Insurance Corporation (FDIC), the interaction between U.S. financial institutions and digital asset companies may soon improve. At the same time, this change may promote the development and adoption of the Crypto asset industry.

Christy Goldsmith Romero, nominee for the chairman of the Federal Deposit Insurance Corporation (FDIC), suggested that banks can provide services to digital asset companies.

Romero made this statement in response to Senator Cynthia Lummis's question on whether financial institutions should provide services to Crypto asset companies.

Romer said: "I don't think it's the FDIC's job to tell banks which industries or companies they should provide services to."

Faryar Shirzad, chief policy officer of Coinbase, also emphasized the importance of Romero's statement and mentioned the impact of Operation Chokepoint 2.0 on the Crypto asset industry.

Meanwhile, Shirzad said: "Unless the White House revokes its crackdown directive and the nominee promises to reverse the current pressure on the digital asset sector, the situation may not change."

Shirzad added: "Bank regulators now claim that there is no targeted liquidation of the Crypto industry, and banks are currently free to deposit Crypto asset companies into banks, but are subject to normal internal risk management reviews."

Meanwhile, if the FDIC sticks with Romero's position, it would mark a major reversal of policy.

Earlier this year, the Federal Deposit Insurance Corporation, together with the Federal Reserve and the Office of the Comptroller of the Currency, issued a notice on the risks of Crypto assets to banking institutions. They stated that business models focusing on Crypto asset activities pose a significant risk to the safety and soundness of the banking industry.

At the same time, it added: "The issuance or holding of Crypto assets issued, stored, and transferred on a decentralized network or similar system is highly likely to be inconsistent with safe and sound banking practices. "

Affected by this position, many banks have restricted or terminated services to Crypto asset users.

Erik Voorhees, founder of Crypto asset exchange Shapeshift, recently complained on social media that fintech company Revolut closed his account due to his involvement in Crypto asset trading.

However, Crypto asset companies are fighting back against these restrictions.

Last month, Coinbase filed a lawsuit against the Federal Deposit Insurance Corporation and the U.S. Securities and Exchange Commission (SEC) seeking documents related to Crypto asset regulation.

Similarly, the Bank Policy Institute (BPI) has expressed support for the repeal of SEC Staff Accounting Bulletin No. 121 (SAB121), which prohibits banks from providing Crypto asset custody services.

“Restricting banks’ ability to provide these services leaves customers with little to no regulation in protecting their digital asset portfolios and ultimately exposes them to greater risk,” said the BPI.