FDIC Chair Travis Hill said his agency should update its guidelines on digital assets to open the door to bank use of blockchain technology.
Hill’s Remarks: Addressing George Mason University’s Mercatus Center, Hill said the FDIC should:
Provide as much clarity as is feasible on what is permissible and what the agency considers safe and sound.
Allow experimentation and testing on digital assets, particularly when there is no material risk, without requiring a lengthy approval process.
Provide certainty that deposits are deposits, regardless of the technology or recordkeeping used, and if there are reasons to distinguish tokenized deposits from traditional deposits.
Distinguish between cryptocurrencies and banks’ use of blockchain and distributed ledger technologies.
OCC’s Hsu: Hill’s speech follow remarks last year from Acting Comptroller of the Currency Michael Hsu that while the public blockchains that support most cryptocurrencies pose significant risks, centrally operated blockchains could improve settlement efficiency through tokenization of real-world assets and liabilities.
Latest on Crypto Risks: Also Monday, the Office of the Director of National Intelligence cited North Korea’s crypto activities in its 2024 Annual Threat Assessment. The report said Pyongyang will continue its ongoing cyber campaign, particularly cryptocurrency heists, and seek various approaches to launder and cash out stolen crypto via mixers.
ICBA Advocacy: In a recent letter, ICBA called on FinCEN to do more to combat mixer-enabled crime, including considering the roles played by the wider crypto ecosystem. ICBA also supports global efforts to advance international cryptoasset regulation, including the Financial Stability Board’s framework to support consistent regulatory standards and the International Organization of Securities Commissions’ baseline policy recommendations.
