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The Coin Rise 2025-03-02 09:50:51

Custodia Bank CEO: U.S. Has Done “Nothing” to Solve Crypto Debanking Issues

Caitlin Long, CEO of Custodia Bank, has criticized the U.S. government for its inaction on crypto debanking issues , stating that no meaningful progress has been made since Donald Trump returned to the White House. Speaking at ETHDenver on February 28, Long emphasized that while some perceive a regulatory shift, federal banking agencies have not rescinded their anti-crypto stance. Regulatory Stagnation in Crypto Banking “It is still presumed unsafe and unsound for a bank to touch a digital asset even in a de minimis amount,” Long remarked, asserting that the regulatory framework remains restrictive despite changing political leadership. She believes that this resistance will eventually fade but noted that the Trump administration has not yet introduced any concrete reforms to address these concerns. A key part of Long’s critique focused on the Federal Deposit Insurance Corporation (FDIC), which she argued has resisted technological progress under the leadership of former Chair Martin Gruenberg. Gruenberg, who was replaced by Acting Chair Travis Hill on January 20, has been linked to “Operation Chokepoint 2.0,” a rumored initiative that sought to cut off banking access for crypto firms. Long stressed the need for a new, reform-oriented FDIC chair to ensure that U.S. banking regulations evolve with technological advancements. SEC’s Shift in Stance and Stablecoin Concerns While Long expressed frustration with the slow-moving banking regulations, she acknowledged that the Securities and Exchange Commission (SEC) has significantly shifted its stance on crypto policy. A day after President Trump’s inauguration on January 20, the SEC established a Crypto Task Force led by Commissioner Hester Peirce, signaling a more open approach to digital assets. One of the most notable regulatory reversals was the SEC’s cancellation of Staff Accounting Bulletin 121 (SAB 121)—a controversial rule that required financial firms to record crypto holdings as liabilities on their balance sheets. The rule had been widely criticized for discouraging institutional adoption of digital assets, and its removal marks a significant shift in policy. Beyond banking and regulatory concerns, Long also highlighted the need for stablecoin legislation that enforces stronger consumer protections. She pointed out that many U.S. banks hold as little as 8 cents in cash for every dollar of demand deposits, making them vulnerable to bank runs. The collapse of Silvergate Bank , a crypto-friendly financial institution, serves as a stark reminder of the risks associated with poor liquidity management. To safeguard consumers, Long argues that stablecoin issuers must hold full cash reserves to back their liabilities, preventing systemic risks in the financial system. The post Custodia Bank CEO: U.S. Has Done “Nothing” to Solve Crypto Debanking Issues appeared first on TheCoinrise.com .

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