Skip to main content

Custodia Bank Founder Caitlin Long: The Fed Thinks Only Large Incumbents Should Service Crypto

Custodia Bank Founder Caitlin Long: 'The Fed Only Think Large Incumbents Should Service Crypto'

Caitlin Long, the founder of Custodia Bank, has railed against the favoritism that the Federal Reserve and the institutions of the U.S. financial system are supposedly showing to incumbents. According to Long, regulators have applied double standards when permitting established financial institutions to serve the crypto market and access instruments like Fed master accounts.

Custodia CEO Caitlin Long Accuses U.S. Federal Reserve of ‘Incumbent Bias’

Caitlin Long, founder and CEO of Custodia Bank, has stated that the U.S. Federal Reserve and other regulators are favoring incumbents when it comes to allowing them to offer cryptocurrency-based instruments in the U.S. market. In a recent interview, Long, who was part of the Wyoming Blockchain Select Committee, declared there is a “coordinated crackdown” on cryptocurrency banking service providers, with the involvement of the White House in the process.

She commented it was “interesting” that after regulatory action against established players in the crypto industry, large incumbents like Charles Schwab, Citadel Securities, and Fidelity Digital Assets announced the launch of EDX, a cryptocurrency exchange.

For Long, this indicates that state financial institutions such as the Fed are “picking and choosing” which companies and banks can get access to their services. On this, Long stated:

The Fed thinks only large incumbents should service crypto. Start-ups that comply with all Fed laws, rules & regulations are being kept out, while Fed lets large incumbents proceed.

Custodia’s Master Account Crusade

Long, who has criticized the treatment of crypto by the U.S. government before, has been at the center of a battle to get Custodia Bank admitted as a Federal Reserve member and to get access to a Federal Reserve Master Account. The startup was denied access to this instrument, which allows for direct banking with the Fed without facing counterparty risks from other commercial banks, due to its “proposed focus on crypto-assets” which “presented significant safety and soundness risks.”

However, Long has found that other institutions which did not qualify legally for having a Fed master account have been using one for some time, according to the recently released master account database.

Long explained:

I see institutions on the list of Fed master account holders that do not appear to be eligible (eg, state-chartered trust companies. So, Reserve Trust wasn’t alone). Under what authority did the Fed grant master accounts to ineligible institutions?

Custodia and the state of Wyoming are taking legal action against the Federal Reserve for not providing access to the central bank’s payments system.

What do you think about Caitlin Long’s stance on financial incumbents and crypto? Tell us in the comment section below.



from Bitcoin News https://ift.tt/7b6SqwK
Labels:

Comments

Post a Comment

Popular posts from this blog

Mt Gox Creditors Updated, Trustee Says Rehabilitation Custodian Is ‘Currently Preparing to Make Repayments’

On August 31, 2022, the Mt Gox trustee Nobuaki Kobayashi explained in a recent letter that the rehabilitation custodian is “currently preparing to make repayments” to Mt Gox creditors. Trustee Updates Mt Gox Creditors — Repayment Date and Exchange Still Unknown Last week speculation and rumors concerning the release of 140K bitcoin ( BTC ) from Mt Gox littered social media platforms and headlines. Bitcoin.com News covered the situation six days ago as a number of people and Mt Gox creditors called the rumors “ fake news .” During that same period of time, a bitcoin whale transferred 10,000 BTC to unknown wallets, and a 2018 annotation , heuristics, and clustering methods show the funds likely originated from the June 2011 Mt Gox hacks. Following the mysterious whale transfer, last Wednesday, Mt Gox published an official update from the court trustee Nobuaki Kobayashi that explains the court is “currently preparing to make repayments” to creditors. Mt Gox creditors have been wait...
Post a Comment
Read more

Fidelity Discusses Bitcoin as Portfolio Insurance — Could Soon Stand in ‘Stark Contrast’ to Path Fiat Currencies Take

Fidelity Digital Assets, a subsidiary of Fidelity Investments, says that bitcoin could be considered portfolio insurance. The firm notes that the cryptocurrency “may soon stand in stark contrast to the path that the rest of the world and fiat currencies may take — namely the path of increased supply, additional currency creation, and central bank balance sheet expansion.” Fidelity Says Bitcoin Could Be Portfolio Insurance Fidelity Digital Assets, a subsidiary of Fidelity Investments, recently published a research study titled “The Rising Dollar and Bitcoin.” The research outlines “how bitcoin could be considered portfolio insurance” as the rising dollar impacts global currency markets. “The strengthening U.S. dollar is wreaking havoc among other countries and may put pressure on the Federal Reserve to soon reverse its tightening monetary actions, something that has precedent based on 1985’s Plaza Accord,” Fidelity explained. In addition, “more monetary debasement may be needed to ...
Post a Comment
Read more

Economists Discuss Russia, China Potentially Developing Gold-Backed Currency That Could Undermine US Dollar

Economists have weighed in on reports that China and Russia may be developing a new gold-backed currency that could undermine the U.S. dollar’s status as the world’s primary reserve currency. Russia and China May Be Developing Gold-Backed Currency Several experts have shared their views on Russia and China potentially creating a new gold-baked currency, Fox Business reported Saturday, emphasizing that China has been buying up huge quantities of gold while Russia was forced off the U.S. dollar due to sanctions imposed on the country following its invasion of Ukraine. The news outlet noted that some experts have cautioned that these moves, along with the closer relationship that has developed between Moscow and Beijing, point to the likelihood of China attempting to launch a gold-backed currency. However, neither Russia nor China has officially confirmed plans for such a currency. Craig Singleton, senior fellow at the Foundation for Defense of Democracies and a former U.S. diplomat,...
Post a Comment
Read more