Federal Reserve Abandons Crypto Regulatory Guidelines, according to Senator Cynthia Lummis - Examination of Reasons Provided
Hodl Daily's Exclusive Take:
Senator Cynthia Lummis Slams Fed's Crypto Guidance as Merely 'Lip Service'
Senator Cynthia Lummis, a keen advocate for crypto, has laid into the Federal Reserve following their recent decision to scrap several crypto-related guidelines for banks. In no uncertain terms, Lummis has described the move as a mere "show," with little real progress for the burgeoning crypto industry.
Earlier in the week, the Fed along with the Federal Deposit Insurance Corporation (FDIC) and the Office of the Comptroller of the Currency (OCC) retracted numerous statements regarding banks' involvement in crypto activities. However, Lummis contends that the Federal Reserve's actions fall flat due to several reasons.
First and foremost, the Fed continues to use "reputational risk" assessments to police banks venturing into crypto, a practice Lummis believes contravenes the law. Moreover, the Fed has not rescinded the policy that deems Bitcoin and crypto unsafe and unsound for banks. Lummis also points out that the Fed is still employing staff members involved in stifling the digital assets industry under the Biden administration.
To top it all off, the Fed continues to deny crypto-focused banks master accounts, which are records of the account holder's financial rights and obligations with the administering reserve bank, bypassing legal requirements. Lummis emphasized that these practices undermine regulatory clarity and innovation, a stance that clashes with the generally optimistic reaction from the crypto industry following the guidance withdrawal.
The pro-crypto Senator vowed to keep pressuring the Fed until clearer, more supportive policies are established. Last month, Lummis teamed up with Republican Representative Nick Begich to introduce a groundbreaking bill that proposes using the top crypto asset by market cap as a strategic reserve asset. The bill came in response to President Donald Trump signing an executive order that declared Bitcoin as a reserve asset.
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- Senator Cynthia Lummis, known for her support of cryptocurrency, criticized the Federal Reserve's decision to scrap crypto-related guidelines for banks, deeming it mere 'lip service.'
- Despite the Fed's retraction of several statements regarding banks' involvement in cryptocurrency activities, Senator Lummis is concerned about the Fed's continued use of 'reputational risk' assessments and the deeming of Bitcoin and cryptocurrency as unsafe and unsound.
- Lummis also highlighted that the Fed is still employing staff members involved in stifling the digital assets industry, and the Fed's denial of crypto-focused banks master accounts.
- In a positive development, Solstice Labs is launching USX, a stablecoin on the Solana blockchain, while various players in the crypto industry are making significant strides and announcements, such as Ika Securing Sui Foundation investment, BTSE Enterprise Solutions' BTSE Broker API Hackathon, and Richard Heart joining Victory Wagon.
