Caitlin Long, the CEO of Custodia Bank, has raised significant concerns about the future of cryptocurrencies in relation to the Federal Reserve's payment system. The source notes that her insights highlight the challenges faced by firms seeking direct access to these essential financial services.
Regulatory Barriers for Cryptocurrency Firms
In a recent statement, Long pointed out that companies operating under trust charters, such as Ripple, will not be able to gain direct access to the Federal Reserve's payment system unless they transition into fully-fledged depository institutions. This distinction is crucial, as it underscores the regulatory barriers that exist for cryptocurrency firms.
Lack of Legal Recognition for Stablecoin Issuers
Long further elaborated that stablecoin issuers currently lack the legal recognition necessary to be classified as depository institutions. This classification is a prerequisite for utilizing key services like:
- Fedwire
- ACH
Federal Reserve's Stance on Payment Infrastructure
These services are vital for efficient payment processing. She expressed skepticism about any potential changes in the Federal Reserve's position, suggesting that the central bank remains steadfast in its belief that only traditional banks should have access to its payment infrastructure.
Currently, cryptocurrency advocates are voicing strong opposition to the Bank of England's proposed limits on stablecoin holdings, which they believe could adversely affect individual savers and the UK's financial landscape. For more insights on this developing situation, read the full story here.
