The Federal Deposit Insurance Corporation (FDIC) is facing calls for a “new direction” from Vice Chairman Travis Hill. In a recent speech, Hill acknowledged that the FDIC had sent “pause” letters to more than 20 banks, instructing them to cease doing business with cryptocurrency firms. This information came to light through a Freedom of Information Act (FOIA) request made by Coinbase, a digital asset exchange.
Paul Grewal, Coinbase’s Chief Legal Officer, revealed unredacted documents that indicated a “coordinated effort” to restrict crypto activity in the United States. Hill expressed his belief that a more effective approach would involve transparently outlining permissible activities and regulatory requirements for conducting them safely and soundly. He criticized the practice of “debanking,” where banks deliberately close or freeze accounts of crypto-related businesses, noting that access to a bank account is fundamental to the modern economy.
The issue of debanking extends beyond the crypto industry, affecting individuals and businesses associated with various sectors. Hill highlighted the historical context of debanking, referencing instances where politically targeted groups, religious organizations, and others have faced similar challenges. He emphasized the importance of addressing these issues promptly and transparently to ensure a fair and inclusive financial system.
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As the FDIC contemplates a new direction in regulating crypto activities and addressing debanking concerns, stakeholders across industries must work together to promote transparency, fairness, and accessibility in the financial sector. By staying informed and engaged, individuals can contribute to shaping a more inclusive and equitable financial system for all.