Republican Senator Cynthia Lummis of Wyoming says that the Federal Reserve withdrawing its crypto guidelines for banking institutions is just “lip service.”
In a new thread on the social media platform X, the pro-crypto legislator says the Fed’s recent actions are largely just for show due to several factors.
Earlier this week, the Fed – alongside the Federal Deposit Insurance Corporation (FDIC) and the Office of the Comptroller of the Currency (OCC) – rescinded many guidelines and statements made toward how banks can conduct crypto activities.
As stated by the Fed at the time,
“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, according to Lummis, the Fed’s actions are superficial because they still use reputation risk when supervising banks. Lummis also says the Fed hasn’t withdrawn the policy that deems Bitcoin (BTC) and crypto as unsafe and unsound. She also says the Fed openly disregards the law when it comes to crypto banks applying for master accounts, which is the record of the account holder’s financial rights and obligations with respect to the administering reserve bank.
Lastly, Lummis points out that the Fed still employs the same staff that tried to stifle the digital assets industry using regulations under the Biden Administration.
Last month, Lummis, alongside Republican Representative Nick Begich, introduced a landmark bill to use the top crypto asset by market cap as a strategic reserve asset. The bill was introduced after President Donald Trump signed an executive order to establish BTC as a reserve asset.
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