Republican Taking Reins at FDIC Suggests U.S. Banking Should Ease Path for Crypto

01/14/2025 01:36

FDIC Vice Chairman Travis Hill is set to become acting chairman at the start of the next administration, and he's critical of the FDIC's digital assets stance.

Jan 13, 2025, 6:06 p.m. UTC

The Federal Deposit Insurance Corp. will soon be under new management, and the senior Republican there, Travis Hill, has outlined some pro-crypto policy thoughts just before he'll take over – at least on a temporary basis, if not as the permanent new chairman.

FDIC Vice Chairman Hill, who is expected to be among those in contention for the job once President-elect Donald Trump takes office, is calling for the U.S. banking regulator to issue new guidance for digital assets. He wants to shed the agency's current, one-by-one approach to directing banks' cryptocurrency ties.

"It has stifled innovation and contributed to a public perception that the FDIC is closed for business if institutions are interested in anything related to blockchain or distributed ledger technology," Hill said in Jan. 10 remarks, which also noted the controversial "pause" letters dug up by a Freedom of Information Act court battle with Coinbase Inc. He suggested those letters illustrated how — in its piecemeal approach to supervising crypto in the banking system — the agency steered many banks away from digital assets business lines.

"I continue to think a much better approach would have been — and remains — for the agencies to clearly and transparently describe for the public what activities are legally permissible and how to conduct them in accordance with safety and soundness standards," he said. "And if regulatory approvals are needed, those must be acted upon in a timely way, which has not been the case in recent years."

Hill, who was a Republican appointee to the board two years ago, also criticized the FDIC's role in pressuring banks to shed crypto clients.

"A longstanding goal of the FDIC’s has been to decrease the number of people who are unbanked," he said. "Efforts to debank law-abiding customers are unacceptable, regulators must work to end it, and there is no place at the FDIC for anyone who has pushed — explicitly or implicitly — banks to stop serving law-abiding customers. "

Current longtime Chairman Martin Gruenberg has told agency employees he'll step down on January 19, the day before the inauguration of Trump. In the absence of a chairman, the vice chairman steps into that role on an interim basis.

Jesse Hamilton

Jesse Hamilton is CoinDesk's deputy managing editor on the Global Policy and Regulation team, based in Washington, D.C. Before joining CoinDesk in 2022, he worked for more than a decade covering Wall Street regulation at Bloomberg News and Businessweek, writing about the early whisperings among federal agencies trying to decide what to do about crypto. He’s won several national honors in his reporting career, including from his time as a war correspondent in Iraq and as a police reporter for newspapers. Jesse is a graduate of Western Washington University, where he studied journalism and history. He has no crypto holdings.