Ex-FDIC Chair Bair: 'I Welcome' New Rules for Crypto

Former FDIC chair Sheila Bair thinks the U.S. needs to create an entirely new regulatory framework for cryptocurrencies.

AccessTimeIconJun 21, 2018 at 7:01 p.m. UTC
Updated Dec 10, 2022 at 9:36 p.m. UTC
10 Years of Decentralizing the Future
May 29-31, 2024 - Austin, TexasThe biggest and most established global hub for everything crypto, blockchain and Web3.Register Now

Sheila Bair, a former chairperson of the Federal Deposit Insurance Corporation (FDIC), believes the U.S. should create a wholly new regulatory framework for cryptocurrencies.

Speaking at CB Insights' Future of Fintech conference on Thursday, the noted Fedcoin supporter – that is, a cryptocurrency operated by the U.S. central bank – addressed the challenges that regulators face when applying existing financial regulations to the nascent crypto space.

She went on to explain:

"We are trying to jam crypto trading into state money transmission laws, it just doesn't work. I think at some point, we will need a federal framework to have some type of regulatory oversight of exchanges established to trade crypto assets. They may also be securities, if there are [initial coin offerings] being used to raise equity, they need to regulate it."

Bair declared that she "welcome[s] regulation" of the cryptocurrency space, advocating for action that takes place sooner than later.

Indeed, the former head of the U.S. government corporation that backs up bank deposits said that the private sector may force financial institutions to adopt private currencies – including cryptocurrencies – because "everybody hates bank account fees, the retailers hate interchange fees."

"If there is a way to get around that, I think you can see a shift [fairly] quickly," she said, adding:

"I do think the Fed needs to get ahead of this."

Bair reiterated her support for a FedCoin, noting that a central bank-issued cryptocurrency would solve transitional issues existing in current monetary policies issues while allowing the Federal Reserve maintain its ability to control the U.S.' money supply.

As an example, she pointed out that a bank which receives a 1.95 percent interest rate with the Fed tried to offer a 0.01 percent rate to individuals opening a savings account.

Sheila Bairhttps://www.cbinsights.com/research-future-of-fintech-livestream/?utm_campaign=FoF18&utm_content=73207902&utm_medium=social&utm_source=twitter image via CB Insights

Disclosure

Please note that our privacy policy, terms of use, cookies, and do not sell my personal information has been updated.

CoinDesk is an award-winning media outlet that covers the cryptocurrency industry. Its journalists abide by a strict set of editorial policies. In November 2023, CoinDesk was acquired by the Bullish group, owner of Bullish, a regulated, digital assets exchange. The Bullish group is majority-owned by Block.one; both companies have interests in a variety of blockchain and digital asset businesses and significant holdings of digital assets, including bitcoin. CoinDesk operates as an independent subsidiary with an editorial committee to protect journalistic independence. CoinDesk employees, including journalists, may receive options in the Bullish group as part of their compensation.


Learn more about Consensus 2024, CoinDesk's longest-running and most influential event that brings together all sides of crypto, blockchain and Web3. Head to consensus.coindesk.com to register and buy your pass now.