5 hours ago
Custodia Bank CEO Caitlin Long accused the US Federal Reserve of softly maintaining anti-crypto policies that favour ample banks portion presenting an quality of regulatory easing.
Long criticized the Fed for rescinding respective restrictive crypto policies past week portion keeping successful spot a cardinal regularisation from January 2023 that blocks banks from straight engaging with crypto.
She warned that the determination would make an unfair vantage for large banks seeking to contented backstage stablecoins portion stifling innovation connected backstage networks.
Fed’s crypto policy
In a elaborate station connected societal media, Long argued that though the Fed rolled backmost 4 pieces of guidance, it deliberately kept a captious argumentation intact. The argumentation prohibits banks from holding cryptocurrencies for their ain accounts, adjacent to screen tiny blockchain transaction fees.
It besides bars banks from issuing stablecoins connected nationalist blockchains similar Ethereum (ETH), alternatively favoring permissioned, backstage networks typically operated by ample fiscal institutions.
Long said:
“The Fed decidedly won connected PR spin.”
She added that the cardinal bank’s April 24 announcement listed each portion of guidance it rescinded but made nary notation of the regularisation it near untouched. She further explained that the remaining argumentation severely limits banks’ quality to connection crypto custody services.
Under existent rules, banks are incapable to wage fluctuating state fees retired of pouch erstwhile processing on-chain transactions, a method obstruction that undermines their quality to service integer plus clients efficiently.
Private blockchains and regulatory control
Long’s disapproval comes amid increasing concerns that the Fed is promoting backstage blockchain solutions controlled by large banks, portion slowing the adoption of decentralized, nationalist blockchain networks.
She warned that this strategy could entrench big-bank dominance implicit emerging stablecoin markets, giving them a caput commencement portion different institutions await caller national stablecoin legislation.
Meanwhile, Senator Cynthia Lummis precocious echoed Long’s concerns, cautioning that the Fed’s latest rollback was “just articulator service.”
Lummis argued that the cardinal slope continues to wield “reputational risk” warnings to restrict banks from engaging with Bitcoin and different integer assets, labeling them “unsafe and unsound.”She vowed to proceed holding Fed Chair Jerome Powell accountable, informing that galore architects of past crackdowns inactive power argumentation today.
Despite President Donald Trump’s medication making efforts toward a broader propulsion for a much crypto-friendly environment, Long and Lummis contend that national regulators stay resistant to full-scale blockchain innovation.
The station Custodia CEO slams Fed argumentation for giving large banks preferential attraction successful stablecoins appeared archetypal connected CryptoSlate.
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