Caitlin Lengthy, CEO and founding father of Custodia Financial institution, has raised considerations in regards to the US Federal Reserve’s dealing with of crypto rules.
Lengthy defined in an April 27 submit on X that despite the fact that the Fed had lately canceled 4 earlier crypto tips, it had left one key rule in place—an announcement made with the Biden administration in January 2023.
This remaining rule stops banks from working instantly with cryptocurrencies and from creating stablecoins on open, permissionless blockchains. As a substitute, it favors stablecoins made by giant banks inside non-public methods.
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Based on Lengthy, this coverage offers conventional monetary establishments a head begin in launching their very own stablecoins, whereas different gamers available in the market have to attend for Congress to move a stablecoin legislation. 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 stated the Fed’s coverage doesn’t simply have an effect on stablecoins. It additionally limits banks from participating instantly in crypto markets. For instance, banks can not act as market-makers for cryptocurrencies like Bitcoin
$94,844.40
, Ethereum
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, or Solana
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.
One other subject she raised is about crypto custody companies. Lengthy defined that banks providing custody normally have to deal with “fuel charges” for blockchain transactions. Nevertheless, underneath present Fed guidelines, banks usually are not allowed to pay these charges, which creates additional hurdles for them to supply correct companies to crypto purchasers.
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 complete story.
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