Senator Cynthia Lummis, a staunch supporter of the crypto industry, has made it clear that she will continue to hold the Federal Reserve accountable until digital assets are fully supported. This comes in response to the Fed’s recent decision to withdraw crypto rules for banks, effectively putting an end to the controversial “Chokepoint” practices that have plagued the industry.
Lummis has been a vocal critic of the Federal Reserve’s previous involvement in the debanking of crypto companies under the administration of former President Joe Biden. The Fed had issued internal guidelines that advised caution when dealing with “controversial” clients, including those in the crypto space. This led to many legitimate businesses being denied banking services simply because of their association with digital assets.
Fortunately, Lummis’ advocacy has yielded positive results for the crypto industry. The Fed announced that member banks will no longer be required to give advance notice of their crypto and stablecoin-related projects. Instead, banks will be monitored for their interactions with digital assets like any other business activity.
While this rule change is a step in the right direction, it does not yet grant crypto-focused banks access to master accounts at Federal Reserve Banks. These accounts are essential for crypto banks to effectively serve customers nationwide. Despite this limitation, the abolition of the Chokepoint practices marks a significant milestone towards greater freedom for the crypto industry.
Many in the crypto community had feared that the Fed would resist making these changes due to perceived tensions between Chairman Jerome Powell and former President Trump. However, the decision has been made, signaling a positive shift towards greater acceptance and support for digital assets.
In addition to the rule change, regulatory agencies like the Federal Deposit Insurance Corporation and the Office of the Comptroller of the Currency have retracted previous statements regarding banks working with individuals in the crypto sector who may be involved in fraudulent activities. This move demonstrates a willingness to address concerns and promote a more inclusive environment for legitimate crypto businesses.
Overall, the efforts of leaders like Senator Lummis to hold the Federal Reserve accountable and advocate for the crypto industry’s interests are essential in driving forward the adoption and acceptance of digital assets. By ensuring that regulatory bodies not only allow but actively support crypto initiatives, we can pave the way for a more inclusive and innovative financial ecosystem.