Bank customers and the US economy face potential losses if a misguided approach is taken towards regulating blockchain technology, according to Travis Hill, Vice Chair of the US Federal Deposit Insurance Corporation (FDIC). Speaking at the Mercatus Center think tank on March 11, Hill warned that the US is already at risk and that the FDIC shares some of the blame. Hill highlighted the benefits of tokenising bank deposits and other real-world assets (RWA), such as the ability to conduct financial transactions with real-time settlement and programmable payments. However, he also raised concerns about the use of unified ledgers, blockchain interoperability, ownership rights, and the potential for programmeability to exacerbate bank runs. Hill called for regulatory guidance and consistency in treating all forms of deposits equally. He criticised the Securities and Exchange Commission’s (SEC’s) Staff Accounting Bulletin 121 (SAB 121), which treats crypto assets differently from other assets and includes tokenised RWA in its definition of crypto assets.
FDIC representative emphasizes the need for enhanced digital asset policy to uphold US global influence