FDIC's New Path: Trump Pick Seeks to Ease Crypto Banking Restrictions

Trump has formally nominated Travis Hill, the acting chair of the Federal Deposit Insurance Corporation (FDIC), to lead the agency on a permanent basis, signaling a potential shift in U.S. banking policy toward greater flexibility in crypto-related activities. Hill, who has served in the acting role since January 2025, has been a vocal advocate for clarifying regulatory frameworks to allow banks to engage with digital assets. His nomination was transmitted to the Senate Banking Committee on October 1, 2025, though no hearing schedule has been set due to a federal government shutdowntitle1^[1].

Hill's tenure at the FDIC has been marked by efforts to roll back restrictive policies on crypto banking. In March 2025, the agency issued guidance rescinding a prior requirement that banks obtain FDIC approval before engaging in crypto activitiestitle7^[6]. The new policy affirmed that institutions could treat crypto-related services-including custody, stablecoin management, and blockchain network participation-as permissible activities, provided they adhere to safety and soundness standardstitle8^[7]. This move aligns with broader Trump administration efforts to ease post-crisis regulatory oversight, including reduced merger scrutiny and opposition to stricter capital rules for large bankstitle6^[5].

Industry stakeholders have highlighted the implications of Hill's leadership. The FDIC's March guidance eliminated a significant procedural barrier, enabling banks to integrate crypto services within existing risk management frameworkstitle8^[7]. This shift is expected to foster deeper collaboration between banks and web3 companies, as institutions gain clarity on permissible activities. For example, custody solutions requiring secure key management and on-chain analytics could become more viable, while crypto firms benefit from the trust associated with FDIC-insured partnerstitle8^[7].

Hill's nomination also reflects broader debates over regulatory clarity and the so-called "debanking" of crypto firms. During his acting chairmanship, Hill criticized allegations that federal regulators pressured banks to sever ties with crypto businesses-a practice dubbed "Operation Choke Point 2.0" by industry critics. His March 2025 letter to financial institutions explicitly stated that crypto activities could be permissible under appropriate safeguards, contrasting with Biden-era policies that emphasized cautiontitle1^[1]. The FDIC's recent release of internal documents and "pause letters" related to crypto oversight has further intensified scrutiny of regulatory practices.

However, the nomination process faces delays. The Senate Banking Committee has not scheduled hearings amid the government shutdown, which was triggered by Congress's failure to pass a funding bill. This uncertainty underscores broader challenges in staffing key financial regulators, as the Trump administration has yet to nominate replacements for the CFTC chair or multiple SEC commissionerstitle1^[1]. Analysts note that Hill's confirmation could accelerate a regulatory environment more open to digital assets but caution that the pace of implementation will depend on Senate action and interagency coordinationtitle9^[8].

The FDIC's evolving stance on crypto reflects a broader federal trend toward aligning banking policy with technological innovation. By rescinding restrictive interagency statements and working with other regulators to refine guidance, the agency aims to establish a framework that balances risk management with innovationtitle13^[9]. This approach has been welcomed by crypto advocates, who view it as a step toward mainstream adoption, though concerns remain about staffing shortages at the FDIC and the potential for regulatory arbitrage.