Senator Lummis cautions against premature optimism in the crypto sector after the Fed’s recent withdrawal of its 2022 guidance for banks. She criticizes the Fed’s continued labelling of digital assets as unsafe and points to the ongoing efforts to restrict crypto firms through ‘Operation Chokepoint 2.0.’ Industry reactions are mixed but underscore a continuing fight for equitable regulations.
Senator Cynthia Lummis has stepped into the limelight, warning the crypto industry not to celebrate prematurely following the Federal Reserve’s recent withdrawal of its 2022 guidance for banks on cryptocurrencies. In her view, the Fed’s actions are merely “just noise” and do not mark any substantial change in policy. This announcement occurred shortly after the Fed rescinded a supervisory letter that had discouraged banking institutions from engaging with crypto and stablecoin activities.
Lummis took to social media on April 25, pointing out that despite some crypto advocates like Michael Saylor and Anthony Pompliano applauding the Fed’s decision, she believes the real issue persists. She argues that the Fed has maintained its broader policy stance, which categorically labels Bitcoin and other digital assets as “unsafe and unsound,” calling it a significant obstacle to innovation.
The senator’s critique does not stop there. She also highlighted ongoing efforts by the Fed to suppress the crypto sector, especially citing “Operation Chokepoint 2.0,” which aims to pressure banks into limiting services offered to crypto firms. Lummis stated, “We are NOT fooled,” indicating her belief that the Fed’s strategies have harmed the industry more than they’ve helped it.
Following a Bloomberg report, she insisted that the Fed’s justification based on reputational risk is unfounded. Lummis believes the central bank is overstepping its authority, particularly regarding master accounts – a crucial aspect for banks engaging in crypto activities.
Moreover, she has vowed to keep up the pressure on Fed Chair Jerome Powell. Lummis is committed to advocating for a level playing field for the crypto industry, arguing they deserve more than just a symbolic token of support – they need real change to thrive.
Echoing her sentiments was Caitlin Long, CEO of Custodia Bank. She expressed gratitude to Lummis for highlighting the misleading nature of the Fed’s latest decisions. Meanwhile, industry reactions continue to be cautious yet optimistic. While figures like Saylor maintain that this shift could encourage banks to support Bitcoin more openly, others remain sceptical.
Overall, there’s a split in opinions on what this means for future regulations and policies. As the debate rages on, it’s clear that advocates for crypto are still fighting for fair treatment within the financial system. The road ahead is muddled, with both hope and caution marking the pathway to greater acceptance of digital assets.
