Key Takeaways
- Lummis accused the Fed of making cosmetic changes without addressing deeper regulatory barriers facing the digital asset industry.
- She argued that the same regulatory mindset remains entrenched at the central bank
Senator Cynthia Lummis criticized the Federal Reserve’s recent decision to roll back several crypto-related supervisory directives, calling the move “just noise, not real progress.” In a statement posted on X on April 25, Lummis accused the Fed of making cosmetic changes without addressing deeper regulatory barriers facing the digital asset industry.
The Federal Reserve had announced a day earlier that it was rescinding a number of measures tied to how banks interact with crypto firms. These included a 2022 supervisory letter requiring banks to notify regulators before engaging in crypto activities and a 2023 directive mandating supervisory non-objection for services involving dollar-pegged tokens.
Going forward, banks will be subject to standard supervision without needing prior approval for crypto-related operations.
In collaboration with the Federal Deposit Insurance Corporation (FDIC) and the Office of the Comptroller of the Currency (OCC), the Fed also withdrew two joint statements issued last year that had warned about potential liquidity risks associated with digital asset exposure.
Despite these reversals, Lummis, a long-time supporter of Bitcoin and sponsor of the Bitcoin Strategic Reserve Bill introduced in 2024, dismissed the changes as inadequate. She argued that the same regulatory mindset remains entrenched at the central bank.
“The same staff who drove Operation Chokepoint 2.0 remain in place,” she wrote, referring to allegations from crypto advocates that regulators have systematically restricted the sector’s access to banking infrastructure.
Lummis further accused the Fed of previously “assassinating companies within the industry” by limiting their ability to access basic financial services, actions she said have damaged American competitiveness in emerging financial technologies.
In particular, she criticized the Fed for maintaining its reliance on so-called reputation risk assessments in bank oversight. Lummis pointed out that the central bank did not repeal Section 9(13) of its Policy Statement, which classifies activities involving cryptocurrencies like Bitcoin as unsafe and unsound banking practices. According to Lummis, this policy continues to pose major regulatory hurdles for banks seeking to engage with the crypto sector, effectively blocking fair access to master accounts and critical financial infrastructure.
While the OCC and the FDIC have reportedly started to move away from reputation-based supervisory standards, Lummis said the Federal Reserve remains isolated in clinging to outdated frameworks. She emphasized that merely withdrawing certain directives does not repair the broader systemic disadvantages facing crypto firms in the United States.
Lummis concluded by pledging to continue pushing for legislative and regulatory reforms. She said that crypto companies deserve “more than a life jacket” and called for a regulatory environment that allows fair participation in the U.S. financial system.
