Crypt Banking Is Facing Strong Opposition, Says FDIC Report
The FDIC has contacted numerous financial institutions regarding cryptocurrency banking and returned with nearly 800 pages detailing the resistance that this kind of banking has met.
The Federal Deposit Insurance Corporation (FDIC) talked to many banks and other financial institutions on the topic of cryptocurrency banking and how easy it was for their customers to engage in this type of banking. They have compiled and now released 790 pages of records showing that banks throughout the United States are very resistant to the idea of crypto banking and that the FDIC itself has also been guilty of making crypto banking very difficult.
Their conversations show that many delays followed requests for banks to provide cryptocurrency services. Many clients were also issued pause letters, and banks had to suffer from heightened scrutiny from the FDIC as a result of their cryptocurrency banking endeavors. This release is part of a larger effort by the FDIC to examine how cryptocurrency firms are regulated and how they operate in relation to traditional financial institutions.
What This Means for Crypto Banking in the Future
Coinbase has been pushing for these documents to be made public. Starting in October of 2024 under the Freedom of Information Act. Because of their efforts, these documents have now been released to the public, and they paint an alarming picture of the state of cryptocurrency banking within the United States.
Coinbase has not been acting alone in trying to have these documents released. Wyoming Senator Cynthia Lummis warned the FDIC that any attempt to destroy documents from as far back as 2022 could result in criminal prosecution, and she has accused the FDIC of record destruction as well.
The FDIC has been the target of numerous complaints of excessive censorship, and there have been claims that they have not provided information as requested to the public. This claim comes from US District Judge Ana Reyes.
Now that this massive report has been made public, the FDIC has issued a statement as they deal with blowback from the public. It has been partly their efforts that have stopped banks from being able to provide easy and accessible cryptocurrency banking, and FDIC Acting Chairman Travis Hill said that the agency would be changing their approach to how they supervise cryptocurrency.
Now that they have been called on the carpet, it looks like crypto banking may become a bit easier.
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