FDIC Vice Chairman Denounces ‘Choke Point-Like’ Tactics, Pledges Crypto-Friendly Reform

FDIC Vice Chairman Travis Hill condemns “Choke Point-like tactics” and vows crypto-friendly reforms, urging a new direction for the agency’s approach to digital assets.

FDIC Vice Chairman Calls Out ‘Choke Point-Like’ Tactics

Travis Hill, Vice Chairman of the Federal Deposit Insurance Corporation (FDIC), criticized the agency’s handling of digital assets and vowed to implement reforms. Hill’s remarks were part of his speech, titled Charting a New Course, delivered on Friday.

Hill condemned what he described as “Choke Point-like tactics,” referring to actions allegedly aimed at debanking cryptocurrency businesses and individuals. The speech follows a contentious period for the FDIC, marked by controversies, including accusations of intentional crypto debanking and workplace scandals.

Hill Pushes for Leadership Change at FDIC

With an upcoming change in leadership, Hill emphasized the urgency for reform, declaring, “The agency needs a new direction.” He criticized the FDIC’s alleged resistance to digital asset innovation and called for an end to practices that alienate crypto-related businesses.

The FDIC recently faced scrutiny after releasing confidential letters prohibiting banks from engaging in crypto-related activities. These documents, disclosed under court order following a Freedom of Information Act (FOIA) lawsuit filed by Coinbase, have fueled allegations of systemic bias against the crypto industry.

FDIC’s History of Crypto Challenges

Hill also addressed the failure of Silicon Valley Bank (SVB), a key banking partner for Circle, the issuer of the USDC stablecoin. He attributed criticisms of SVB to poor financial modeling rather than significant risks to its balance sheet.

The Vice Chairman urged the FDIC to revisit its 2021 crypto policy roadmap, which reportedly shifted under the leadership of outgoing Chairman Martin Gruenberg. Hill called for hiring tech-savvy staff to better understand emerging technologies.

“Efforts to Debank Crypto Must End,” Hill Declares

“Efforts to debank law-abiding customers are unacceptable” Hill stated. “Regulators must work to end it.” He also called for a broader reassessment of banking regulations and emphasized the importance of staying neutral on non-financial political issues, such as climate change.

As the FDIC prepares for leadership changes, Hill’s remarks set the stage for potential shifts in crypto policy. Stakeholders in the financial and crypto sectors are encouraged to monitor developments closely.