Caitlin Long Slams Fed’s Secret Rule Giving Big Banks a Stablecoin Edge

Caitlin Long, CEO of Custodia Bank, has accused the US Federal Reserve of covertly favoring large financial institutions while publicly feigning support for cryptocurrency. The Fed rescinded four restrictive policies but retained a critical anti-crypto rule from January 2023, effectively stifling blockchain adoption by preventing banks from holding digital assets.

Senator Cynthia Lummis has drawn parallels between the Fed’s actions and Operation Chokepoint 2.0, suggesting a coordinated crackdown on the crypto industry. Long’s detailed April 27 thread on X highlighted how this remaining regulation creates significant barriers for banks seeking direct involvement in cryptocurrency markets.

The persistent regulatory ambiguity continues to cast a shadow over institutional crypto adoption, particularly affecting stablecoin development where banks maintain a competitive advantage. This comes amid growing scrutiny of the Fed’s dual approach to digital asset regulation.