Senator Lummis Criticizes Fed’s Crypto Guidance Withdrawal

Fed’s April 24 Decision Faces Backlash

On April 24, the Federal Reserve announced it rescinded previous directives requiring banks to seek supervisory non-objection for engaging with digital assets. Senator Lummis condemned this action as insufficient and detrimental to innovation.

In her critique, Senator Lummis, a vocal crypto supporter, accused the Fed of stifling innovation and harming U.S competitiveness. The guidance was meant to align banks with crypto operations under standard supervisory frameworks.

Senator Cynthia Lummis, U.S. Senator for Wyoming, – “The Fed withdrawing crypto guidance is just noise, not real progress. We are NOT fooled.”

Regulatory Uncertainty Worries Crypto Firms

The withdrawal of guidance did not lead to immediate fiscal changes, leaving regulatory uncertainty for crypto firms. Banking access risks persist, impacting major cryptocurrencies and digital asset services.

Market confidence is potentially affected as regulatory vagueness continues. Lummis’ criticism brings attention to the need for clearer regulatory frameworks to support crypto innovation in the United States.

Operation Chokepoint 2.0 Sparks Concerns

This event recalls “Operation Chokepoint 2.0,” where financial services to crypto firms were restricted. Historical repercussions included market volatility and disruptions to banking services for crypto exchanges.

Expert analysis suggests that without clearer guidance, the U.S. may lag in crypto innovation. Previous regulatory crackdowns led to significant market shifts and potential long-term consequences for the digital economy.