Everybody wants to be a Bitcoin billionaire these days.
Now that apparently includes the head of the Federal Deposit Insurance Corporation (FDIC).
And you won’t believe what the FDIC Chairman had to say about Bitcoin’s future.
Jelena McWilliams, who was appointed by Donald Trump to lead the FDIC in 2018, is looking to mainstream a good portion of the crypto economy.
Apparently, she could have really used cryptocurrency 30 years ago.
During a recent speech at Money 20/20 she said it’s critical for regulators to be open to innovation.
She told a story about barely scraping by when she first came to America – and mailing cash home only to have it stolen on the way about three-quarters of the time.
But the underlying theme of that story – how her family lost everything when the currency collapsed in Yugoslavia – may have more to do with her interest than convenience.
Considering soaring prices for goods of all types, it’s possible the FDIC Chairman seems to be aware that a growing number of Americans are looking for an alternative to the dollar.
In October, McWilliams told Reuters, “I think that we need to allow banks in this space, while appropriately managing and mitigating risk,” McWilliams said. “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.”
In a bid to keep banks relevant, Reuters reported that she has a team of bank regulators working on, “a more precise set of rules for banks interested in engaging with Bitcoin and cryptocurrency. That would clarify how U.S. banks could hold BTC in custody to facilitate client trading, use it as collateral for loans, or even hold them on their balance sheets.”
The FDIC has a vested interest in making sure banks stay financially stable.
While it is responsible for insuring all bank deposits in the US, it only has a tiny fraction of cash on hand to make good on that promise if anything were to go wrong.
The agency is required to keep 1.3% of money insured in reserves, but, according to its website, tries to stick closer to 2%.
When Americans started building up their savings at the beginning of the COVID-19 pandemic, the reserve dropped below the 1.3% threshold.
They’re not saying how low it went, but the agency’s website says they have an eight-year plan to get it back up to at least 1.35%.
No doubt if banks are allowed to accept crypto they will be paying insurance premiums on those deposits.
No news yet on whether the FDIC wants to collect premiums in US dollars – or if it trusts crypto more.
Stay tuned to Right News Wire for any updates to this ongoing story.