- On Thursday, the Federal Reserve canceled certain Crypto directives of the Biden era.
- But he maintained a regulation targeting banks at state level.
- Critics say that the central bank is still an obstacle to the adoption of American cryptography.
On Thursday, the Federal Reserve withdrew from a series of guidance warning banks from the Biden era against the commitment of the cryptography industry.
The overthrow could lead to an injection of new capital on the cryptographic markets, according to industry observers who applauded the latest example of federal decline in cryptographic regulations which, according to them, have strangled the American growth of crypto in recent years.
But the American senator and champion of Bitcoin Cynthia Lummis, a Wyoming Republican, said that this decision was a victory of name only.
“The actions of the federal reserve by removing Crypto directives yesterday are only lip services,” she said in a press release on X on Friday.
“I will continue to hold the Fed responsible until the digital asset industry obtains more than a life jacket, President Powell – they need a fair shaking.”
Lummis has cited the Fed’s continuous refusal to approve the applications of cryptographic banks for so -called masters. The main accounts allow institutions to access the central bank payment system.
The senator also pointed out that the Fed councils still in force, which judge the activities of crypto dangerous, as well as the continuous use by the central bank of the so-called risk of reputation to judge the activities of the banks.
Since the 1990s, regulators have cited the risks for the reputation of banks as a reason for refusing certain activities. Some legal researchers – and, more recently, supporters of cryptography – have criticized the practice to give regulators to suffocate certain companies, such as firearms manufacturers and pornographers, for non -financial reasons.
After the collapse of the Crypto Exchange FTX in 2022, American regulators repressed the industry, issuing guidance warning banks against the maintenance of cryptographic customers.
Critics compared the repression to a controversial program of the Obama era nicknamed Operation Chokepoint, which targets industries with high financial fraud levels by “stifling the criminals even” which must be survived – their bank accounts. The program otherwise meant legal companies, which are so little recommendable, had trouble opening or maintaining bank accounts, according to criticism.
The president of the Fed, Jerome Powell, weighed on the debate in February, when he told legislators that there was merit to allegations that crypto societies had been unjustly targeted.
“We are all struck by the number of complaints and their width,” said Powell, adding that “at least a part is real. We must understand and prevent him from performing.”
Since Donald Trump took office in January, federal regulators have withdrawn a large part of the Cryptography Directives of the Biden era.
In January, the Securities and Exchange Commission canceled staff accounting bulletin 121, a short accounting index that prevented large banks from holding large amounts of crypto for their customers.
Last month, two other regulators – the office of the currency controller and the Federal Deposit Insurance Corporation – gave Banks Express the authorization to offer crypto services without requesting prior approval.
Thursday, the Fed followed suit. He canceled a letter of 2022 which indicates that the banks must provide notice before offering cryptography services, and a letter of 2023 which forces banks to watch stablecoin products to prove first that these products were safe.
He also withdrew from the joint letters emitted with the OCS and the FDIC, which indicated that the volatility of cryptographic assets should not migrate to the American banking system.
“These actions guarantee that the expectations of the Council remain aligned with the development of risks and support more innovation in the banking system,” the Fed said in a press release.
But the Fed did not cancel a letter of 2023 requiring that the banks at the level of the state require its approval before offering crypto services.
Alex Thorn, research manager in the Crypto Galaxy company, criticized this decision in a research note on Friday.
“The fact that the Fed did not cancel its anti-Crypto declaration of January 27, 2023 means that there remains confusion and important obstacles,” wrote Thorn.
“State banks must look at this and scratch their heads, wondering if they are allowed to make crypto.”
Aleks Gilbert is DL News“DEFI correspondent based in New York. You can reach it at aleks@dlnews.com.
