Senator Lummis: Fed‘s Crypto Move is ‘Just Noise’
While the crypto industry may be celebrating the recent withdrawal of the US Federal Reserve’s crypto guidance for banks, Senator Cynthia Lummis isn’t buying it. In a recent X post, Lummis stated that the Fed‘s move is “just noise, not real progress,” arguing that it’s merely “lip service” and not a genuine shift in policy.
The Fed‘s April 24 announcement, which reversed its 2022 supervisory letter discouraging banks from engaging with crypto and stablecoin activities, was met with optimism from many in the industry. However, Lummis, a vocal advocate for crypto, sees the move as a cosmetic change that doesn’t address the core issues.
Concerns Remain Despite Fed‘s Backtrack
Lummis highlighted several points that indicate the Fed‘s stance on crypto hasn’t truly changed. She pointed out that the Fed continues to “illegally flout the law on master accounts” and maintains its reliance on reputational risk in bank supervision practices. This approach, she argues, continues to stifle innovation and hinder the growth of the crypto industry.
Furthermore, Lummis underscored that the Fed‘s policy statement in Section 9(13), which has not been withdrawn, still considers Bitcoin and digital assets “unsafe and unsound.” This categorization, she believes, reflects the continued skepticism and lack of understanding within the Fed regarding the potential of crypto.
A Long-Term Battle for Fairness
Lummis also emphasized the continued involvement of many of the same staff behind Operation Chokepoint 2.0, a controversial initiative aimed at discouraging financial institutions from working with certain businesses, including those in the crypto space. This, she suggests, indicates that the Fed‘s approach towards crypto may not be as welcoming as it initially appears.
Lummis‘s stance aligns with Custodia Bank founder and CEO Caitlin Long, who also expressed skepticism towards the Fed‘s announcement, calling it “just a life jacket” for the industry, and urging for a “fair shake” for crypto companies.
While other industry leaders, such as Michael Saylor and Anthony Pompliano, lauded the Fed‘s move as a step forward, Lummis‘s sharp criticism underscores the complex and evolving nature of crypto regulation. It remains to be seen how the Fed will navigate its relationship with crypto, and whether its recent move is a genuine shift in policy or simply a temporary reprieve for the industry.
