FDIC Considers New Rules That Could Influence Banking with Cryptocurrency
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FDIC Considers New Rules That Could Influence Banking with Cryptocurrency

The Federal Deposit Insurance Corporation will review regulations potentially affecting cryptocurrency firms in response to ongoing debanking allegations.

The board of directors of the Federal Deposit Insurance Corporation (FDIC) is preparing to review proposed regulations that could have a significant effect on cryptocurrency enterprises amidst claims of debanking activity.

In a recent announcement, the FDIC indicated it would discuss a notice of proposed rulemaking focused on banning the use of reputation risk by regulators. Although the agenda does not specifically cite concerns regarding debanking associated with digital currencies, Travis Hill, the acting chair of the FDIC, has publicly criticized regulators for employing reputation risk as a reason to hinder banks from engaging in cryptocurrency-related operations, including the facilitation of client transactions to exchanges.

President Donald Trump referred to this notion in an executive order issued in August, which aimed to ensure fair banking practices. He asserted that allowing regulators to consider reputation risk might lead to politicized or unlawful debanking activities.

Prior to Trump’s presidency, there were widespread allegations within the cryptocurrency sphere regarding the denial of access to U.S. banking services, which were perceived to be part of a state-driven agenda against digital asset-related activities.

Documentation disclosed in December, pursuant to a Freedom of Information Act (FOIA) request involving the FDIC, revealed attempts by the regulator to instruct certain banks to suspend all activities linked to digital assets in 2022.

The actions, branded as ‘Operation Chokepoint 2.0,’ emerged as a contentious topic in the political arena, particularly for Trump and various Republican factions during the 2024 election cycle. Following Trump’s election victory and Hill’s appointment, Hill remarked that the regulator would reassess its supervisory policies concerning cryptocurrency activities.

Additionally, the U.S. government experienced a shutdown recently when lawmakers couldn’t agree on a funding extension, significantly affecting operations at key financial regulatory bodies. However, the FDIC has declared that it would remain operational regardless of the duration of the shutdown.

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