The Federal Deposit Insurance Corporation (FDIC), one of the federal banking regulators in the U.S. and one of two entities that provide deposit insurance to federally-regulated institutions, is taking a look at how banks are exploring digital currencies, its top official said Tuesday.
Speaking to the Federalist Society, FDIC Chair Jelena McWilliams said the federal regulator wants to hear from banks about how they are approaching the digital asset space and what role the FDIC should play.
“At the FDIC we have been watching such developments closely, and plan to issue a request for information to learn more what banks are doing, what banks are considering doing and what, if anything, the FDIC should do in this space,” she said.
McWilliams noted that financial technology firms have been becoming more engaged in the U.S. banking sector, particularly through the COVID-19 pandemic, and wants these fintech firms to collaborate with banks.
The FDIC joins other federal bank regulators in exploring the digital asset space. The Federal Reserve, the U.S.’s central bank, last week published a proposal to allow certain chartered financial institutions access to its accounts. This move would benefit Wyoming Special Purpose Depository Institutions, which include Kraken Bank and Avanti, two crypto-native firms.
The National Credit Union Administration, another federal regulator, is dipping its toes into crypto as well. NCUA Vice Chair Kyle Hauptman said his agency should explore issuing guidance around digital assets and how federal credit unions can interact with the industry earlier this year, and the agency has recently posted
The Office of the Comptroller of the Currency (OCC), however, has taken the most concrete steps in bringing the banking sector together with the digital asset industry. Under former Acting Comptroller Brian Brooks, the OCC published several pieces of guidance outlining how banks can interact with digital assets, and has now granted multiple federal trust charters to crypto-native firms.
The U.S. government is also researching a digital dollar, a central bank digital currency version of the greenback.
In her speech Tuesday, McWilliams said other countries are also evaluating sovereign digital currencies. She pointed to China’s digital yuan as one example.
“Far from merely a domestic endeavor, the digital yuan has the potential to expand internationally,” she said. “One recent estimate is this currency could eventually reach 1 billion users, all while bypassing U.S. dollar-related systems and ultimately the U.S. sanctions regime as well. This should give us a lot to think about.”
