The Federal Deposit Insurance Corporation is developing guidelines for tokenization of deposit insurance.

PANews, November 14 - According to a report by Bloomberg, the head of the Federal Deposit Insurance Corporation (FDIC) stated that the agency is developing tokenization deposit insurance guidelines to assist financial institutions in expanding their digital asset business. Acting Chairman Travis Hill noted that the transfer of deposits from the TradFi world to the Blockchain or Distributed Ledger world should not change their legal nature. When Hill made this statement, various parties were debating a question: how should financial technology companies, which are not directly covered by FDIC insurance, fully compensate consumers if their funds are damaged? Many financial technology companies collaborate with FDIC-insured banks to offer products that enjoy “pass-through deposit insurance” coverage, but once the third-party partner goes bankrupt, this protection may face challenges and may not effectively safeguard consumer rights. The U.S. government's deposit insurance fund is the cornerstone of the financial system, aimed at protecting depositors in the event of bank failures.