FDIC’s Travis Hill Signals Major Shift in U.S. Crypto Regulation

Date: February 10, 2025

Time: 8:37 p.m. UTC

Travis Hill, the Acting Chairman of the Federal Deposit Insurance Corporation (FDIC), has announced a significant overhaul of the agency’s approach to cryptocurrency regulation. This announcement comes as U.S. senators are scrutinizing regulatory barriers preventing banks from engaging with the crypto sector.

Changes on the Horizon

The FDIC’s decision to reassess its guidelines aligns with expectations that the Office of the Comptroller of the Currency (OCC) and the Consumer Financial Protection Bureau (CFPB) might also shift their stances toward digital assets. Rodney Hood, a known proponent of cryptocurrency, has recently taken over the OCC. Hood previously stated during his tenure as chairman of the National Credit Union Administration that cryptocurrency is essential for competitive financial services. This perspective suggests a potential reevaluation of previously strict OCC guidelines, particularly those established in 2021 that hindered banks from engaging with crypto ventures without prior regulatory approval.

Regulatory Background

In 2021, the OCC, along with the FDIC and the Federal Reserve, issued guidance advising caution among banks looking to offer crypto-related products. These guidelines imposed strict requirements, which many in the industry believe discouraged banks from investing in digital assets altogether. Hill’s directive to undertake a comprehensive review of banking supervision related to crypto is anticipated to change this landscape, potentially opening more avenues for banking services to incorporate digital assets.

CFPB’s Current Challenges

In parallel, the CFPB is facing significant operational challenges under the Trump administration, which has seen budget cuts and a shift in leadership priorities. Russ Vought, appointed as the acting head, has expressed intentions to reduce the agency’s influence, eliciting criticism from industry proponents and Democratic lawmakers. Brian Armstrong, CEO of Coinbase, has publicly supported calls for the CFPB’s dissolution, labeling it an ‘activist organization’ that has mismanaged consumer protection in the crypto space.

Despite past leadership’s attempts to regulate stablecoins and digital wallets, recent developments indicate a freeze on such initiatives. Lawmakers like Senator Elizabeth Warren have criticized the administration’s actions as benefitting wealthy contributors at the expense of consumer protection.

Legislative Moves on Stablecoins

Democratic leaders, including Warren and Representative Maxine Waters, are mobilizing efforts to preserve the integrity of the CFPB amidst Republican criticisms. Waters recently unveiled the text of a bipartisan stablecoin regulation bill, which may address concerns regarding state authority over stablecoin issuers, although currently, the Republican approach does not reflect this collaboration.

Industry Outlook

As the landscape of crypto regulation in the U.S. continues to evolve with leadership changes and legislative developments, many in the crypto industry are cautiously optimistic about a newfound engagement with U.S. banks. Both the FDIC and OCC’s re-evaluation of their respective policies may signal a period of increased integration between traditional financial institutions and the rapidly expanding digital assets market.

About the Author

Jesse Hamilton is the Deputy Managing Editor on CoinDesk’s Global Policy and Regulation team, based in Washington, D.C. With over a decade of experience covering Wall Street regulation, Hamilton has gained recognition for his insightful reporting on the intersection of finance and technology.