FDIC representative emphasizes the need for enhanced digital asset policy to uphold American influence

Bank customers and the US economy face potential losses if blockchain technology is not regulated properly, according to Travis Hill, vice chair of the US Federal Deposit Insurance Corporation (FDIC). Hill warned that the US is already at risk and acknowledged that the FDIC shares the blame for this. He explained that tokenisation of bank deposits and other real-world assets could enable real-time financial transactions and programmable payments, improving settlement times and reducing risks. However, Hill also highlighted the need for regulation regarding unified ledgers, blockchain interoperability and ownership rights. He suggested that programmability could aggravate bank runs and therefore an “off” switch should be implemented to prevent this. Hill criticised the FDIC’s current regulations for treating all blockchain transactions the same, whether they involve real-world assets or cryptocurrencies, and called for consistency in the treatment of all forms of deposits.