Dig deeper, and the mud gets thicker. The Fed’s policy still labels Bitcoin and digital assets as “unsafe and unsound” under Section 9(13). It’s a rusty lock on the door for banks wanting to dip into crypto, creating hurdles as high as a Wyoming mountain.
Lummis also fumes over the Fed’s “reputation risk” assessments—unlike the OCC or FDIC, they’re still wielding this vague club, which she calls outright illegal.
These lingering rules are like old, creaky fences, blocking the clear path the crypto world craves for growth. The SEC oversight role remains crucial for market stability and investor protection. Despite recent Fed reversals on crypto-related measures, Lummis argues that deeper barriers remain unaddressed, stifling the industry.
Then there’s the shadowy “Operation Chokepoint 2.0” allegation. Lummis accuses Fed staff of isolating crypto from traditional banking, practically “assassinating companies” with internal cautions against “controversial” clients. She insists that such federal actions show no real progress in easing crypto regulations.
It’s a silent squeeze, colder than a Cheyenne blizzard, and she points fingers at Vice Chair Michael Barr for enabling this “debanking.”
Meanwhile, master account access for crypto banks like Custodia remains a locked vault. Without it, they’re stranded outside the Fed’s payment systems, unable to play on equal ground.
Contrast this with the OCC and FDIC inching toward crypto-friendly policies, and the Fed looks like a stubborn grandpa refusing to try email.
Lummis, relentless, pressed Chair Powell in hearings for a “fair shake.”
Powell, in February 2025, promised a “fresh look” at debanking—ironic, isn’t it, how a senator’s prodding might nudge a giant?
Yet, as innovation suffocates under restrictive rules, one wonders: is the Fed guarding stability or just clutching dusty ledgers while the future slips away?
