Technology and Markets: A Fireside Chat with Travis Hill | DC Fintech Week 2026

Welcome. I hope you guys have a great day today and I want to welcome on stage of my friend Travis Hill. He has been the chairman obviously of the of the FDIC but a friend to this conference, a friend to me. Um and I'm just looking forward to get his comments. So, I Travis come on.

[applause]

Take a seat. Okay. So, you've you've been busy and thank you so much by the way for for joining us as always. Okay. So, there's this thing called the genius act.

I think you've heard a little bit about it and you I know that you've gotten comments back now from the FDIC. You even asked the industry for you know, a small batch of 144 additional questions to be answered. Um when you look at the comments that you've received thus far, has has anything surprised you? Is anything new and and kind of different that you may not have expected? Um and and sort of closely aligned to it, did you see anything that was particularly convincing or maybe even changed your original views as you were reading through the comments?

Sure. Appreciate the question and and thanks thanks everyone for having me. So, so yeah, as you said our our genius act proposal asked a long list of questions. We got a lot of comments, a lot of helpful feedback. We are working hard on a final rule now so going through all those comments and incorporating them into whatever will be the the final document.

I would say there were there are a number of interesting questions that we're working through that we got helpful feedback on. To give a few examples, one is thinking about permissible activities. Um so so what what are ancillary activities that issuers can engage in beyond the most simple and straightforward of issuing stablecoins and and uh and investing in reserve assets. How prescriptive should the rule be? Um what what activities should be prohibited?

How explicit should the rule be about that? Um another set of questions is around stablecoin issuers that issue multiple stablecoins, multiple brands of stablecoins. Um should there be one pool of reserve assets for for each uh each different brand of stablecoin or should the pools be isolated? And the sort of corollary to that is if one stablecoin falls, can you know, can one fail and the other ones continue or does the whole thing have to go down in aggregate? Um tokenized deposits is another area that we asked some questions about that we got a lot of feedback on.

Um I think we will have more work to do after this rulemaking no matter what in that respect because there's a lot of moving pieces there. Um but those are those are a few examples of of some of the types of questions that we we got a lot of a lot of feedback on that that we're grappling with as we move to the final rule.

Uh this is I apologize. It's a law professor question. So So when you get this those comments back, is there anything about this process with genius act where you feel like as compared to your maybe let's say past notice and comment iterations where you know, you're like, "Wow, there are all these extra things that you know, um uh you know, we're going to have to figure out um to help to support the legislation to to to get it through." I mean, do you feel like that ambit or spectrum of additional questions, is it is it was it more or less as expected? Is it narrower?

Is it different from how it normally is in terms of the the the the ambit of sort of technicalities that you have to think through?

I think it's I think it's within the general ballpark of what's typically expected. Um I think what's one thing that's a little bit unique here is the fact that there are a lot of different rule-makings that are all sort of happening in parallel. Um the fact that the you know, the OCC went first with their rule-making and so our rule was sort of built off of that but had uh had some deviations from it and so we've been continuing to coordinate closely with them and so seeing how they're thinking about things as they were moving to their final rule, I think kind of triangulating between all of that is one thing that's a little bit unique about this. Um but I think otherwise for the most part it you know, we asked a lot of questions to try to open up the aperture and make sure we had logical outgrowth for different options. Um and so I think most of the feedback we got was sort of within the you know, sort of the broader remit of of what we were thinking about.

Very cool. So again, we know we we are at AWS so you know, there are certain kinds of themes that we'll be talking about today including the GenTech commerce and you know, you said something really kind of interesting recently which was you know, you're thinking about different kinds of worlds not just you know, how do you implement rules but what what's the world of banking going to look like? And and one potential scenario was a world where AI agents sort of move customer deposits the moment a better rate appears. And you know, what we've seen is in the past maybe runs you know, where humans with with telephones but but but what does a run even look like when you have millions of software sort of optimizing sort of different accounts at at at once and how does this change the way in which you you think about insurance coverage?

Yeah, so um, a a lot to unpack there. Um, uh so, you know, I think I think just as a sort of a a threshold threshold matter for for just to put this all in perspective. Um, I think it's worth noting that today, you know, for depositors that want to um, achieve high yield on their bank deposits, that's a very easy thing to do. Um, if you go on if you go online, there are a lot of websites that will rank banks based on their based on the yield they offer on their deposits. There are a number of services today where you put your money with the service and they will move your money around to to different high yield accounts.

Um, there are a lot of customers that use those types of services and and options, but then there are many who don't for a variety of reasons and part of that in a lot of cases is that there are other things that customers are looking for in their relationship with with a with a bank. Um, you know, the the sort of um, evolving nature of some of these new technologies and new tools. Um, you know, it's something we're certainly watching very closely. Um, I think there's an open question about to what extent are um, people and businesses going to delegate the decision-making authority to these types of tools to be able to move their money around. You know, that's something that may happen over time, but how quickly does that happen and how pervasive is it?

I mean, I think those are really the the key questions and it's worth also noting that there's a a significant portion of deposits across the system that are business accounts and those businesses have a lot of reasons for why they choose the banking relationships that they choose and again, the question is are are those treasures of those corporations going to rely on um, these types of tools to to be moving their money around and and changing their banking relationships.

Yeah, you know, it's it's really interesting because you think about, you know, agentic commerce and then you know, I'll ask me you know, sort sequentially like some questions obviously about on-chain finance and and you've already mentioned tokenized deposits a little bit. But when you combine agentic commerce on different kinds of rails then, you know, it's it's fascinating because it's it's a it's a infrastructure question. Um, uh uh you know, how much of it is is is legal or not. I I find you know, like is it a legal question or is it a regulatory question or is this just an infrastructure question? Clearly you have like genius act where you're thinking about tokenized um well, stable coins.

You're you're obviously thinking about tokenized deposits. But just agentic commerce in and of itself outside of the rail question. Uh I suppose it's just more of a safety and soundness question than it is anything else. Like like I don't know. Does the bat signal go off in your head when you when you sort of see agentic commerce where there's a certain um you know, opportunity or concern that's that's usually raised?

I mean, I think from our perspective we're I mean, we're focused on the banking system and so we're focused on safety and soundness of the banking system and kind of financial stability more broadly. You know, to the extent there are new tools that are beneficial to individuals and sort of their daily lives and their ability to engage in daily transactions. I mean, those are all good things and we generally want to promote innovation that helps that helps the economy and and and consumers. Um but you know, to the extent that that is impacting how money moves through the banking system and how payments are made. Um obviously that has a big impact on on what we do.

Well, you know, I guess this gets to the bigger point that so much of banking is now moving, uh you know, outside of a traditional bank. You know, they're either maybe moving through um a fintech or either moving through a wallet now. Um and you're not necessarily operationalizing the service I I should say through a a traditional bank branch. Um you know, a couple of of of of weeks ago um you had thought about and and the agency had thought about replacing the 2023 third-party guidance uh with more of a principles-based approach. Um could you um sort of provide us with a little bit of just sort of, you know, what do you think that the a principles-based approach is going to uh get you?

Um and how does it respond specifically to that um uh development, you know, outside of your traditional bank branch? And and, you know, obviously one of the first questions that that kind of arises in your head is, you know, how do you give banks the room to operate within any kind of structure, principles-based or or otherwise, where you have companies that don't necessarily have like 10, 20-year uh track records?

Yeah, so I think um I think kind of zooming out um a lot of these bank-fintech partnerships present a tremendous amount of value. Um there are a lot of fintechs that are that can be a lot more nimble and more innovative and satisfy consumer demand for what they want and what they're looking for in terms of engaging with a financial services provider. Um and then having banks on the back end that can provide deposit services and and other types of uh other types of services. So, you know, we want a a regulatory framework that encourages and enables those types of partnerships, um but we're also mindful of some of the challenges and risks that come along with that. Um when it comes to the the third-party risk management specifically, um that that that the guidance that was issued in 2023 has has presented a number of challenges.

Um I think one of the big challenges is that it presents a fairly exhaustive list for banks to to to look at when it comes to partnerships and a lot of those partnerships, there are aspects of that that are not applicable, and so it it's it's been challenging for for institutions to understand how to apply that guidance in the context of the breadth of different types of relationships. And so, I think the proposal that we put out, which would replace the 2023 guidance, is intended to kind of raise it up a bit hot to a bit of a higher level, um and and emphasize the fact that whatever frameworks are in place need to be tailored to the to the specific relationships.

Uh I was about to ask you, well, what would be the primary principle? And I guess you've just now answered that, so you've preempted that that that particular question. I guess part of the the the issue is even when you move to to principle-based um uh sort of formats and and frameworks, uh ultimately, the FDIC has a job. That that job has to do with uh resolution readiness, um the certainty of the financial system. You spent a lot of time thinking about uh the issues of resolution readiness, and congratulations, you know, uh in in 2026, doing a little bit of research, it looks like uh so far so far uh with NanoBank being the latest, everything was resolved uh over a weekend uh with depositors made whole on Monday.

Great. But, how much of that survives and your traditional playbook survives when deposits are tokenized and particularly where collateral is moving on Saturday nights on on digital rails?

Yeah, so this is another question where there's there's a lot to unpack and something that we've certainly been thinking a lot about for several years. You know, I think that there's sort of a a threshold question here which is when it comes to the fact that um the activity level when it comes to money moving is dramatically lower on nights and weekends, how much of that is a product of the payment rails and how much of that is the fact that people are not working and businesses are closed and people are sleeping and and and I think the answer probably somewhere in the middle, but that is relevant to how we think about our resolution function. So, in the in the typical resolution which which includes all the resolutions over the past couple years the bank fails on a Friday after after after business hours and a transaction is announced immediately at the same time that the closure is announced and the acquiring institution immediately takes position takes possession of the failed institution. Over the weekend, they kind of do the initial conversions etc. and then the bank reopens on Monday as part of the as part of the new institution.

Um in a world where money is moving over the weekends, that that's really not going to have that big of an impact on sort of that traditional again that the most common uh the most common outcome when we have a a resolution. Um I think if if if money is moving 24 hours a day and there is no decline in the volume of transaction and so there's basically no end of the day on Friday. Um that would make things more challenging in terms of when you kind of uh shut the door on the on the institution. Um but again, you know, the fact that payment rails are only open certain hours, I think is only one factor in when sort of activity slows down. Um because again, most of the world still operates on on some sort of uh some sort of business hours where there is a slowdown uh at a certain time of the day.

Uh there there are also exceptions um and you know, I'd look at at the First Republic failure as an example of that where um First Republic failed on a or or First Republic failed late in the evening on Sunday night. There was widespread widespread speculation on Friday going through the weekend that First Republic's failure was imminent. There was a very strong desire to put to announce the transaction and the the failure before markets open on Monday morning. Um I think on the one hand that demonstrates that failing a bank the night before a business day is something that we can do that that that works. Um but on the flip side, if you do have that sort of And again, this was a very rare that there was that degree of media attention on something that again is is is almost always not public and is, you know, we protect that confidentiality very carefully.

Um but in that sort of scenario where there is this widespread speculation, the fact that there is this weekend where you don't have um markets open in in 24/7 money movement and trading was was helpful. Um so again, I think overall we're we're thinking a lot about a lot of these questions. There's a lot of uh secondary and tertiary considerations here, but at a very high level, those are a few thoughts on it.

Uh I'll hold on a second, being law professor. Uh uh kids, there are seats open in the front. Uh we have lots of you uh standing up. Feel free. It's It's He's not going to bite you, usually.

Uh So, you know, it it is fascinating because the overall narrative, you know, that I hear is that there's um um uh sort of an interest in figuring out, you know, I'm a securities lawyer by by training or um you know, there's this question of how do we make trading 24/7? How do we make sure that our markets stay open 24/7? Um and and there's a little bit of a question is like is the friction for on you on the trading side, you know, how much, you know, you also hear about every everything from pre-funding, if you're a stablecoin, if you're you know, how does it move in terms of the operation of the banking system, you know, how much pressure do you see banks and/or or and by extension the FDIC ultimately feeling from the capital market side? Um I I think it's just an interesting question and I don't know if if if you've seen it yet or if you're just like, well, right now, you know, early innings. We'll see how it

Well, I'll say first of all, I mean, I think as a general matter, I mean, innovation is going to happen and I think as a general matter, that is all very positive. And so, I think the ability for people to be able to move money more easily, to be able to get money where it needs to go faster, I mean, those are those are very positive developments. Um it you know, that that being said, there are are always trade-offs and there are certain benefits of having frictions in place, whether it's in on trading or on sort of payment settlement. Um but again, you know, you have to balance the the the the positives and the negatives and I think as a general matter, the positives are going to significantly outweigh the negatives. I would say on on the on the more direct question about sort of the impact of of markets on banking.

I mean, I I would say that's not a huge consideration. I I think there are you know, there are cases where um the sort of, you know, getting things in place before markets open is is um is important and especially when we're talking about potential large bank failures that uh that can have financial stability consequences. Um but I'd say that's one of a long list of things that that we're thinking about.

Interesting. Uh and we did have a conversation yesterday on like atomic settlement and you know, what that does, which is not exactly the same thing, but certainly close enough uh that I'm sure it it it runs across your radar. Okay, so a couple of other questions um uh you you may have heard about like genAI. Um so

I I think it's called super intelligence.

It's super intelligence. Like sorry, I like see super intelligent. Uh we need a super intelligent moderator. Uh okay, so uh obviously in April um the there was a revisiting or rewriting of some of the um model risk guidance and uh you know, gen AI was or super intelligence or uh was sort of carved out. Um where where exactly does that work go from here?

We've you know, heard some indications from the White House. What what exactly are are are you doing in this space?

Yeah, so um so another topic we're we're thinking a lot about. I think super intelligence has the potential to be transformational in in many ways. It's something that um many people across society and the economy are are grappling with. Um as you noted, we did carve it out of the model risk management. There was a general perception that um the model risk management guidance was not appropriate for for this type of technology.

At this point we are considering a number of possible steps in in terms of where to go from here in terms of our supervisory program. This is obviously a very fast moving area and and so I think at some point there will be some value in providing some additional clarity on how we're thinking about it from a supervisory perspective, but but we're we're still contemplating that just giving the evolving and and fast moving nature of it.

Again, just kind of curious as to how how these things work in inside of of of the agency. So if you have something that is as sort of category defining as super intelligence, right? There are all kinds of ways in which it can affect banking. Maybe it's your supervision, maybe it's your compliance, maybe it's you know, accelerating as we said earlier, you know, maybe it's it's in the form of external pressures where AI agents are are our super intelligent agents are taking money in and out of bank accounts looking for the for the best rate. Um Regulatorily, do you just sort of take the whole category at once or is it let's go pinpoint the biggest sort of pressures and then kind of work down to the to the you know, you kind of more or less kind of a triage approach or how exactly do you approach that?

Yeah, that's a good question. I think it's I think at the moment it's more thinking about all the different use cases is is as one. Um But um But yeah, but that's a good question. It's it's probably a there's probably a little bit of both.

That's part of I need to be super intelligent to figure that one out. But it you know, because there are so many different kind of areas that kind of pop up and I'm always kind of curious as just sort of even how do you how do you tackle it. But um you know, look, you're you're looking at super intelligent agents, you're looking at um tokenized deposits, you know, [clears throat] you're obviously have your genius act and your stable coin implementation. You're getting comments by the hundreds every couple of weeks um as well as proposals. So, you your your your vision uh on what's coming in and out is is is very unique.

What what's the most interesting or underappreciated question that people should be asking um when it comes to bank regulation and banking more more generally?

Um yeah, that's a that's a that's a hard question to That's what they call it to rank. Um you know, I don't know if this is underappreciated. It's probably appreciated, but uh I think one of the biggest and most interesting questions is just how fast will we see adoption of these new technologies? Um when it comes to tokenization, how quickly will we see commercial activity and economic activity moving on chain? Um there's a lot of sub questions to that.

Um you know, my general perception is it's likely to be a gradual shift over time. Um but but who knows? Uh and and I think, you know, is is this months or you know, months or years and and um you know, what are the what are the use cases? What are the customers? It's it's something where the the benefits are widely known.

There's been tremendous investment from uh financial institutions around the world. Um and and the sort of agentic side of that, you know, again, as we talked about before, how quickly do do to what extent do people delegate decision-making authority and how quickly does that happen and how does the financial system react to that and how does that migration occur? And so I think all of that all of those I think are are very interesting. I don't know if they're under appreciated but at least interesting questions.

Just just one quick follow. Those are incredibly core questions. How How do you feel about you know, you've now been in the in in in the job for for for a while. How do you feel about just the nimbleness of agencies to respond to these kinds of fast-moving questions? I mean, do you feel um more sort of changes of some sort are are are required given the velocity or given your comments here, you know, maybe these things do take a while to kind of seep into the system, but

Yeah, I mean, I think I think being nimble as a government agency is always challenging. You know, the APA process values deliberativeness rather than nimbleness, but there are there are still tools at our disposal. You know, I think trying to make sure that we're continuing to be on top of innovation as it occurs is is important. I think there have certainly been times in recent years where regulators have kind of put their heads in the sands as as as things are moving and so I think we've tried hard to to to pivot from that approach, but nonetheless, I mean, it's it's always a it's always a challenge and then there's always a little bit of a a chicken and the egg dynamic where you know, we want to impact markets as they're developing to the extent that there's going to need to be regulatory considerations, but at the same time we want to let things develop and blossom and don't want to, you know, don't want to move too quickly and so I think there's always trade-off to consider in terms of when is the right time to set rules of the road and and how clear versus versus flexible should those rules be.

Well, our next panel was clearly well, listening to your comments very closely. It's called pipes and plumbing. Um with folks from City managing director of partnerships and the New York Department of Financial Services Caitlin Astro, Samara Cohen on the finance all these great folks. And they're in your office all day long. I do want to thank you for coming to our office to talk to our audience.

This is DC Fintech Week, but we'll we'll ask ourselves now what the New Yorkers think of your comments and thank you so much again. Everyone in the back as well, feel free to [music] come up front as we get our next panel. Thank you.

Thanks everyone.