The post The Federal Reserve deceived everyone with its rescission of anti-crypto rules appeared on BitcoinEthereumNews.com.

Caitlin Long, the CEO of Custodia Bank, said the Federal Reserve tricked the public by pretending to ease up on crypto rules but actually keeping the most important anti-crypto restriction alive. Caitlin posted a detailed thread on X Sunday explaining that while the Fed made noise about scrapping four pieces of anti-crypto guidance, it left one major piece in place. This surviving policy, she said, was issued alongside the Biden White House’s anti-crypto statement back on January 27, 2023, and it still blocks banks from touching crypto in any real way. Caitlin said the guidance left untouched does three main things. First, it blocks banks from holding cryptoassets as principal, meaning they can’t even pay a small gas fee. Second, it stops banks from issuing stablecoins on permissionless blockchains. Third, it keeps a clear preference for permissioned blockchains — ones controlled by big banks — even though the OCC and FDIC dropped that idea. Caitlin said, “The Fed has maintained a regulatory preference for permissioned stablecoins,” warning that this creates a first-mover advantage for big banks’ private stablecoins before the broader stablecoin bill becomes law. Fed favors big banks while stifling crypto custody Caitlin said the Fed’s refusal to let banks deal with crypto directly has bigger consequences than most realize. Not only does it block Wall Street banks from making markets in major tokens like BTC, ETH, and SOL, but it also screws over banks trying to offer crypto custody. Caitlin explained that crypto custodians usually need to estimate gas fees ahead of time. If the estimate is too low because network fees spiked, the transaction would fail. In the current setup, a bank acting as a custodian can’t pay the missing amount, which would force the transaction to die. This issue grows even messier because custodians often split…

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Filed under: News - @ April 28, 2025 6:19 am