Under the leadership of the proposed Federal Deposit Insurance Corporation (FDIC) chair, interactions between U.S. financial institutions and digital asset companies may soon see improvements. This change could potentially boost the development and adoption of the crypto asset industry.
Christy Goldsmith Romero, nominee for FDIC chair, suggested that banks could provide services to digital asset companies.
Romero made these remarks in response to a question from Senator Cynthia Lummis about whether financial institutions should serve crypto asset companies.
Romero stated, “I don’t believe it is the FDIC’s role to dictate which industries or companies banks should serve.”
Faryar Shirzad, Chief Policy Officer at Coinbase, emphasized the significance of Romero’s statement and mentioned the impact of “Operation Chokepoint 2.0” on the crypto asset industry.
Shirzad also noted, “Unless the White House rescinds its crackdown directive and nominees commit to reversing the current pressures faced by the digital asset space, things may not change.”
He added, “Banking regulators now claim there is no targeted crackdown on the crypto industry, and banks are free to onboard crypto asset companies subject to normal internal risk management reviews.”
Meanwhile, if the FDIC maintains Romero’s stance, it would signify a major policy reversal.
Earlier this year, the FDIC, along with the Federal Reserve and the Office of the Comptroller of the Currency, issued a notice regarding the risks of crypto assets to banking institutions. They stated that business models focused on crypto asset activities pose significant risks to the safety and soundness of the banking industry.
They also added, “Issuance or custody of crypto assets issued, stored, transferred on decentralized networks or similar systems likely does not align with safe and sound banking practices.”
Influenced by this stance, many banks have restricted or terminated services to crypto asset users.
Erik Voorhees, founder of crypto asset exchange Shapeshift, recently complained on social media that fintech firm Revolut closed his account due to his involvement in crypto asset trading.
However, crypto asset companies are pushing back against these restrictions.
Last month, Coinbase filed a lawsuit against the FDIC and the U.S. Securities and Exchange Commission (SEC), seeking documents related to crypto asset regulation.
Similarly, the Bank Policy Institute (BPI) expressed support for repealing SEC Staff Accounting Bulletin No. 121 (SAB121), which prohibits banks from providing crypto asset custody services.
BPI stated, “Restricting banks’ ability to provide these services leaves customers with poorly regulated protection of their digital asset portfolios and ultimately exposes them to greater risks.”
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