Banking

FDIC seeks feedback on banks’ crypto plans

WASHINGTON — The Federal Deposit Insurance Corp. will soon seek details from regulated entities about their use of digital assets, Chairman Jelena McWilliams said Tuesday in a speech calling on U.S. regulators to encourage financial innovation.

As the Biden administration and the Federal Reserve have signaled an interest in exploring a potential U.S. digital currency, McWilliams said the FDIC is planning to issue a request for information focused on how banks are investing in and deploying digital assets.

“We must learn how to manage the risk coming from innovation and new technologies, because if we do not allow entrepreneurship to flourish in the United States, it will flourish elsewhere,” said FDIC Chairman Jelena McWilliams.

Bloomberg

“One topic that some banks have begun to look at is digital assets,” McWilliams said at a virtual event hosted by the Federalist Society. “At the FDIC, we have been watching such developments closely and we plan to issue request for information to learn more about what banks are doing, what banks are considering doing and what, if anything, the FDIC should be doing in this space.”

While McWilliams’s comments were vague about the timing and details of the request for information, she said that regulators should work to minimize regulatory costs when creating new rules for digital currencies and other emerging technologies.

“It has been my goal as chairman that the FDIC lay the foundation for the next chapter of banking, by encouraging innovation that meets consumer demand, promotes community banking, reduces compliance burdens and modernizes our supervision while increasing the number of banked Americans,” McWilliams said.

Her comments come as new cryptocurrency firms have sought state charters in Wyoming and won national trust charter approvals through the Office of the Comptroller of the Currency.

McWilliams warned that the American financial system will not be able to keep up with global counterparts if regulators are avoid taking risks.

“Our banks have to innovate to survive,” she said. “And though agencies historically have tended to be risk averse, we must learn how to manage the risk coming from innovation and new technologies, because if we do not allow entrepreneurship to flourish in the United States, it will flourish elsewhere.”


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