Federal Reserve’s Withdrawal of Crypto Guidance ‘Just Lip Service,’ Says Senator Cynthia Lummis – Here’s Why

Republican Senator Cynthia Lummis of Wyoming has criticized the Federal Reserve for what she deems as insincere actions regarding its recent withdrawal of crypto guidelines for banking institutions. In a series of posts on the social media platform X, Lummis expressed her belief that the Fed’s actions are merely “lip service” and lack substance.

The Federal Reserve, along with the Federal Deposit Insurance Corporation (FDIC) and the Office of the Comptroller of the Currency (OCC), recently rescinded guidelines related to how banks can engage in crypto activities. The Fed stated that these actions were taken to align expectations with evolving risks and to support innovation in the banking system.

However, Senator Lummis argues that the Fed’s actions are superficial. She points out that the Fed still considers Bitcoin and other cryptocurrencies as unsafe and unsound, and continues to use reputation risk as a factor in supervising banks. Additionally, Lummis highlights that the Fed has not addressed the issue of crypto banks applying for master accounts, and that the same staff responsible for imposing restrictive regulations on the digital assets industry under the Biden Administration are still in place.

Last month, Senator Lummis and Republican Representative Nick Begich introduced a landmark bill to designate Bitcoin as a strategic reserve asset. This move came after President Donald Trump signed an executive order to establish BTC as a reserve asset.

In conclusion, Senator Lummis remains critical of the Federal Reserve’s handling of crypto-related matters, and believes that more concrete actions need to be taken to support the growth and innovation of the digital assets industry.

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