FDIC to Reevaluate Regulations Affecting Bank-Crypto Interactions
The FDIC's upcoming board meeting will address regulations that may alter the relationship between banks and cryptocurrency businesses amidst ongoing debanking issues.
The Federal Deposit Insurance Corporation (FDIC) is preparing to evaluate proposed regulations that might affect the operations of cryptocurrency companies amid claims of debanking.
According to a notice issued on Thursday, the FDIC plans to discuss the notice of proposed rulemaking concerning the prohibition of using reputation risk by regulators. Although the agenda does not directly reference debanking associated with digital assets, acting chair Travis Hill has previously condemned regulators for applying reputation risk as a reason to stop certain banks from participating in crypto transactions, which includes allowing clients to transfer money to exchanges.
In an executive order titled “guaranteeing free banking” from August, US President Donald Trump referred to reputation risk, asserting that it could lead to “politicized or unlawful debanking.” While this order does not explicitly mention digital assets, the crypto community has long alleged discrimination in accessing US banking services due to a coordinated effort surrounding digital assets.
Documents released in December via a Freedom of Information Act request revealed that the FDIC had directed some banks to suspend all activities related to crypto assets in 2022.
Related: Crypto debanking is ‘still occurring’ as banks stick to Chokepoint policies
Dubbed “Operation Chokepoint 2.0” by some, these alleged practices became a pivotal issue for Trump and his Republican allies during the 2024 election campaign. After Trump’s victory and the appointment of Hill, the acting chair confirmed that the agency would be reassessing its approach towards supervisory practices concerning crypto activities.
In other news, the ongoing US government shutdown, which commenced on Tuesday due to a failure to pass a spending bill, has brought significant disruptions to numerous federal agencies, including the Securities and Exchange Commission and the Commodity Futures Trading Commission. However, the FDIC claims it will continue its operations regardless of the shutdown’s duration.
