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:

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:

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 Bair image via CB Insights