- The crypto industry was warned by Senator Cynthia Lummis that the Federal Reserve’s decision to withdraw its 2022 crypto guidance for banks is “just noise” and not meaningful progress.
- Lummis criticizes the Fed’s broader policy stance, which still labels Bitcoin and digital assets as “unsafe and unsound.”
- She claims the Fed continues to block crypto innovation, referencing ongoing efforts like “Operation Chokepoint 2.0.”
U.S. Senator Cynthia Lummis is warning that the Federal Reserve’s recent withdrawal of its 2022 crypto guidance for banks is far from the breakthrough it appears to be.
In an April 25 post on X (formerly Twitter), Senator Lummis, a longtime proponent of digital assets, cautioned the industry against premature celebration, calling the Fed’s move “just noise, not real progress.” Her comments followed the Fed’s April 24 announcement that it would rescind a supervisory letter that had previously discouraged banking institutions from engaging in crypto and stablecoin activities.
Crypto luminaries like MicroStrategy Executive Chairman Michael Saylor and entrepreneur Anthony Pompliano hailed the decision as a step forward for Bitcoin and broader digital asset adoption by banks. However, Lummis remains skeptical, arguing that the Fed’s actions amount to little more than “lip service.”
Senator Cynthia Lummis has criticized the Federal Reserve for continuing to flout the law on master accounts, arguing that it uses reputational risk as an unjustified rationale for its oversight of banks. Her remarks align with a recent Bloomberg report, which reveals that the Federal Deposit Insurance Corporation (FDIC) is working to prevent regulators from using reputational risk as a pretext to restrict legitimate banking activities, highlighting growing concerns about the transparency and fairness of regulatory practices.
Senator Lummis Slams Fed Crypto Policy
Moreover, Lummis pointed out that the Fed’s broader policy position remains largely unchanged. Specifically, Section 9(13) of the Fed’s policy framework, which labels Bitcoin and digital assets as “unsafe and unsound,” remains in full effect. In her view, withdrawing a single letter while leaving a hostile regulatory foundation untouched is not the victory many are proclaiming.
Adding fuel to her argument, Lummis emphasized that key officials involved in “Operation Chokepoint 2.0” an alleged effort to pressure banks into cutting off services to crypto firms, are still actively shaping digital asset policy today.
“We are NOT fooled,” Lummis declared. “The Fed assassinated companies within the industry and hurt American interests by stifling innovation and shuttering businesses. This fight is far from over.”
In a strong closing statement, the Wyoming senator vowed to maintain pressure on Fed Chair Jerome Powell and the central bank until the crypto industry receives more than “a life jacket.” They deserve, she said, “a fair shake.”
Custodia CEO Backs Lummis on Fed Crypto Warning
Custodia Bank CEO Caitlin Long, a prominent voice in the digital banking sector, echoed Lummis’ concerns, thanking her for “THANK YOU for seeing this for what it is.”
The crypto industry largely responded with cautious optimism to recent developments. Michael Saylor noted that the decision would allow banks to “begin supporting Bitcoin” more openly. Anastasija Plotnikova, CEO of blockchain regulatory firm Fideum, called the move “a significant development” that could help pave the way for broader institutional adoption of cryptocurrencies.
However, opinions on the shift remain divided. While some see it as a historic milestone, others, like Senator Lummis, argue it is a strategic move aimed at placating the industry without effecting real change. Crypto advocates on Capitol Hill maintain that the struggle for fair treatment in the financial system is ongoing. The path forward remains uncertain, as the fight for favorable regulations and policies continues.
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