Caitlin Long, founder and CEO of Custodia Bank, criticized the US Federal Reserve for maintaining an anti-crypto policy that favors big bank-issued stablecoins, despite easing some crypto partnership regulations for banks. She highlighted that the Fed's January 27, 2023, statement blocks banks from directly engaging with crypto assets and prohibits them from issuing stablecoins on permissionless blockchains. Long emphasized that this regulatory preference for permissioned stablecoins gives traditional financial institutions an unfair advantage in developing private stablecoins while the market awaits stablecoin legislation. She urged Congress to expedite the passage of a federal stablecoin bill that could supersede the Fed's policy. Additionally, Long pointed out how the Fed's restrictions hinder banks from participating in crypto markets as principals and impede their ability to offer crypto custody services. Senator Cynthia Lummis supported Long’s view, deeming the Fed's actions as “lip service.” While other executives celebrated the Fed’s announcements as positive, Long's concerns center around the ongoing influence of the Fed's restrictive measures on crypto developments, particularly in custody and market-making operations.

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