Caitlin Lengthy, CEO and founding father of Custodia Financial institution, has raised issues concerning the US Federal Reserve’s dealing with of crypto laws.
Lengthy defined in an April 27 publish on X that though the Fed had just lately canceled 4 earlier crypto tips, it had left one key rule in place—a press release made with the Biden administration in January 2023.
This remaining rule stops banks from working straight with cryptocurrencies and from creating stablecoins on open, permissionless blockchains. As a substitute, it favors stablecoins made by massive banks inside non-public techniques.
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In accordance with Lengthy, this coverage offers conventional monetary establishments a head begin in launching their very own stablecoins, whereas different gamers out there have to attend for Congress to cross a stablecoin regulation. She identified that if new federal laws is handed, it may overrule the Fed’s present strategy. She added, “Congress ought to hurry up”.
Lengthy additionally mentioned the Fed’s coverage doesn’t simply have an effect on stablecoins. It additionally limits banks from participating straight in crypto markets. For instance, banks can not act as market-makers for cryptocurrencies like Bitcoin
$94,231.46
, Ethereum
$1,781.36
, or Solana
$146.70
.
One other concern she raised is about crypto custody companies. Lengthy defined that banks providing custody normally have to deal with “fuel charges” for blockchain transactions. Nevertheless, below present Fed guidelines, banks aren’t allowed to pay these charges, which creates further hurdles for them to offer correct companies to crypto shoppers.
Not too long ago, Paul Grewal, Coinbase’s chief authorized officer, despatched two letters to Performing Director Jamieson Greer of the Workplace of Authorities Ethics (OGE) and to new SEC Chair Gary Gensler. What did the letters deal with? Learn the total story.
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