Senator Cynthia Lummis criticises the Federal Reserve’s removal of crypto guidelines, claiming it’s just superficial action. The Fed, along with the FDIC and OCC, recently rescinded crypto-related guidelines, but Lummis argues this move overlooks ongoing risks, retains negative views on crypto, and leaves former regulatory personnel in charge.
Republican Senator Cynthia Lummis, representing Wyoming, has voiced her frustration regarding the Federal Reserve’s recent withdrawal of its crypto guidelines for banking institutions, labelling these actions as mere “lip service.” In a thread posted on the social media platform X, Lummis articulated that the Fed’s recent moves appear more performative than substantive, driven by several underlying issues.
Earlier this week, the Federal Reserve, alongside the Federal Deposit Insurance Corporation (FDIC) and the Office of the Comptroller of the Currency (OCC), rescinded various guidelines previously set for how financial institutions manage crypto activities. At the time, the Fed claimed, “The Federal Reserve Board on Thursday announced the withdrawal of guidance for banks related to their crypto-asset and dollar token activities and related changes to its expectations for these activities. These actions ensure the Board’s expectations remain aligned with evolving risks and further support innovation in the banking system.”
However, Senator Lummis argues that the Fed’s changes are mostly cosmetic, as the institution still employs reputation risk in supervising banks. She noted that the Fed has not retracted its position that considers Bitcoin (BTC) and other cryptocurrencies to be unsafe. Additionally, Lummis accused the Fed of ignoring the legal framework surrounding crypto banks’ applications for master accounts, which detail the responsibilities and rights of account holders with respect to the reserve bank.
Lummis also highlighted that key personnel who previously attempted to limit the growth of the digital assets sector under the Biden Administration remain in their positions. Last month, she collaborated with Republican Representative Nick Begich to introduce a significant bill advocating for the use of Bitcoin as a strategic reserve asset, following an executive order signed by former President Trump aiming to recognise BTC in this way.
