Senator Lummis: The Federal Reserve's withdrawal of the cryptocurrency bank regulatory rules is "not a real advance."

Source: Cointelegraph Original text: "Senator Lummis: Federal Reserve's withdrawal of cryptocurrency bank regulation rules is 'not a real advancement'"

U.S. Senator Cynthia Lummis warned that the cryptocurrency industry might be celebrating too soon about the Federal Reserve easing its regulatory guidance on crypto for banks. In a post on the X platform on April 25, Lummis stated: "The Federal Reserve retracting its crypto guidance is just noise and not a real advancement." She referred to the Federal Reserve's announcement on April 24 to withdraw the 2022 regulatory letter discouraging banks from engaging in cryptocurrency and stablecoin activities as "just a hollow check."

Lummis who "won't be fooled"

Lummis, known as a supporter of cryptocurrencies (she proposed the "Bitcoin Strategic Reserve Act" in July 2024), pointed out several flaws in the Federal Reserve's statement. Although MicroStrategy founder Michael Saylor and crypto entrepreneur Anthony Pompliano believe this is a step forward in the relationship between banks and the cryptocurrency industry.

Lummis pointed out that the Federal Reserve is still "illegally circumventing regulations related to master accounts," and continues to rely on "reputational risk" as a criterion in banking regulatory practices. According to the latest report from Bloomberg, the Federal Deposit Insurance Corporation (FDIC) is developing new rules that would prohibit examiners from considering reputational risk factors when assessing bank operations.

Lummis particularly emphasized that the Federal Reserve's policy statement section 9( (which has not been revoked) continues to classify Bitcoin and digital assets as "unsafe and unsound" investment vehicles. She also revealed that many of the officials currently involved in formulating cryptocurrency policy are the very same people who led "Operation Chokepoint 2.0").

"We will not be fooled. The Federal Reserve has stifled innovation, forced companies to close, harmed the entire industry, and damaged American interests. This struggle is far from over." Lummis stated, "Chairman Powell, I will continue to hold the Federal Reserve accountable until we have a fair competitive environment in the digital asset industry — not just a lifeline."

Custodia Bank ( founder and CEO Caitlin Long expressed strong resonance with this. She responded on social media: "Thank you for seeing the essence of the matter!"

However, other executives in the cryptocurrency industry welcomed the Federal Reserve's decision, viewing it as a positive development for the industry. MicroStrategy Executive Chairman Michael Saylor stated in a post on the X platform on April 25 that this move by the Federal Reserve means "banks can now freely conduct Bitcoin-related business."

Anastasija Plotnikova, co-founder and CEO of the blockchain compliance company Fideum, pointed out that the Federal Reserve's decision "is significant and will pave the way for institutional adoption of cryptocurrencies."

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