FDIC Chairman Says U.S. Banks Should Be Allowed To Hold Cryptocurrencies

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Federal Deposit Insurance Corporation (FDIC) President Jelena McWilliams said earlier this week that U.S. banks should be allowed to hold cryptoassets.

The Federal Deposit Insurance Corporation (FDIC) is “an independent agency created by Congress to maintain stability and public confidence in the nation’s financial system.” To achieve its objectives, the FDIC “insures the deposits; examines and supervises financial institutions for the safety, soundness and protection of consumers; makes large and complex financial institutions resolvable; and manages the adjustments.

McWilliams was “sworn in as the 21st President of the FDIC on June 5, 2018”. She “serves a six-year term on the FDIC board of directors and is appointed president for a five-year term.”

His crypto comments were made on Tuesday, October 26, during an interview with Reuters in Las Vegas at the FinTech Money20 / 20 conference (held October 24-7, 2021).

McWilliams told Reuters how U.S. regulators are exploring options for banks to hold cryptoassets. This could mean “clearer rules on the custody of cryptocurrencies to facilitate transactions with customers, use them as collateral for loans, or even keep them on their balance sheets as more traditional assets.”

She said:

“I think we need to empower banks in this space, while managing and mitigating risk appropriately.

“If we don’t bring this activity inside the banks, it will develop outside the banks. … Federal regulators will not be able to regulate it. ”

According to Reuters, McWilliams’ comments provide “the most comprehensive picture yet” of what U.S. regulators are exploring as part of their “sprint” to investigate the cryptocurrency. The team’s goal is to coordinate policy among the three major U.S. banking regulators: the FDIC, the Federal Reserve, and the Office of the Comptroller of the Currency.

McWilliams said his goal within the interagency group was “to essentially provide a way for banks to act as a custodian of those assets, to use crypto assets, digital assets as a form of collateral.”

Disclaimer

The views and opinions expressed by the author, or anyone mentioned in this article, are for informational purposes only and do not constitute financial, investment or other advice. Investing or trading crypto-assets carries a risk of financial loss.

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