FDIC Chair Urges "Careful and Deliberate" Approach to Crypto Regulation

FDIC Chair Martin J. Gruenberg said that the agency must implement a cautious and deliberate approach to crypto regulation, and that existing regulatory concepts can apply to crypto assets.

In remarks at the Brookings Institution, Mr. Gruenberg said that the majority of transactions involving crypto assets revolve around the purchase and sale of cryptocurrencies and other digital assets. He reiterated that there has been growing interest among banking institutions to engage in crypto asset transactions. Mr. Gruenberg said that banks should be permitted to engage in crypto transactions so long as they can demonstrate the ability to safely conduct the activity. He noted that the FDIC currently has a process for banks to inform the agency if it plans to engage in crypto asset transactions.

Mr. Gruenberg also discussed the potential benefits that certain crypto assets, like stablecoins, may provide, but maintained that stablecoins have not yet demonstrated any value to the broader payment system. He urged regulators to thoughtfully consider whether to issue a stablecoin, because its issuance could drastically alter the banking system. He argued that if a stablecoin is issued, it should be designed to work with the Federal Reserve Board's FedNow system and a potential future U.S. central bank digital currency.

Mr. Gruenberg said that the FDIC will continue to work closely with banking organizations and other regulators to ensure that crypto asset activities are carried out in a safe and sound manner.