FDIC Chair confirms efforts toward Crypto involvement in the US banking system
Jelena McWilliams, the Federal Deposit Insurance Corporation (FDIC) Chair, confirmed in an interview with Reuters earlier this week, that the U.S. bank regulators are carving out a framework to facilitate holding crypto assets in bank accounts, to further regulate the fast-developing asset class.
She noted that authorities are making space for crypto while simultaneously “mitigating risk”. Furthermore, McWilliams asserted that regulators can either allow crypto activities under a legal framework, or the decentralized sphere will continue to function without any regulation, there is no in-between.
“I think that we need to allow banks in this space, while appropriately managing and mitigating risk…If we don’t bring this activity inside the banks, it is going to develop outside of the banks…The federal regulators won’t be able to regulate it.”
Crypto Mom recommends working with the decentralized industry instead of against them
While most cryptocurrencies are experiencing an impressive bull, crypto supporters from within the government are emphasizing the importance of a better approach towards the inevitably growing decentralized industry. Last week, Commissioner Hester Peirce, aka “crypto mom” suggested that the commission should carve out a system to work with cryptocurrency businesses, instead of working against them. The Commissioner noted that the sooner regulators understand the importance of crypto, the better it will be in foreseeable future for the nation’s financial markets.
“I think it’s safe to assume that crypto is going to grow in size…And so what we can do now to invest in building a reasonable framework, I think, will pay off down the line.”, said Peirce.
Peirce commented on SEC’s long-standing conservative approach towards financial investments, which in turn makes the regulators take an anti-crypto stance. However, she argued that big players do not get affected, but crypto start-ups and smaller businesses get caught up in the “tremendously hard” and time-consuming process of complying with SEC rules.
“Regulators tend to be very conservative for a reason…If something doesn’t get approved, we’re not going to get blamed; if something does get approved and something goes wrong, we will get blamed. But that hesitation is really costly for smaller entities.”, Peirce added