{"id":9188,"date":"2025-03-02T06:51:27","date_gmt":"2025-03-02T05:51:27","guid":{"rendered":"https:\/\/wsj-crypto.com\/?p=9188"},"modified":"2025-03-02T06:51:27","modified_gmt":"2025-03-02T05:51:27","slug":"caitlin-long-no-progress-in-u-s-crypto-banking-since-trumps-comeback","status":"publish","type":"post","link":"https:\/\/wsj-crypto.com\/index.php\/2025\/03\/02\/caitlin-long-no-progress-in-u-s-crypto-banking-since-trumps-comeback\/","title":{"rendered":"Caitlin Long: No Progress in U.S. Crypto Banking Since Trump’s Comeback"},"content":{"rendered":"

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The US administration has accomplished \u201cnothing\u201d to tackle crypto debanking challenges since US President Donald Trump returned to the Oval Office, according to Custodia Bank\u2019s CEO Caitlin Long.<\/p>\n

While addressing the audience at ETHDenver on Feb. 28, Long stated<\/a> that although the \u201cperception is that there has been a relaxation, none of the federal banking authorities have actually rescinded any of the anti-crypto directives.\u201d<\/p>\n

\u201cIt is still assumed to be unsafe and unsound for a bank to engage with a digital asset, even in a minimal amount,\u201d Long emphasized, arguing that \u201cnothing\u201d has shifted.<\/p>\n

\u201cThat is bound to change, no doubt about it, but Trump hasn\u2019t put forth [anything] yet.\u201d<\/p><\/blockquote>\n

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Caitlin Long speaking at ETHDenver in Denver, Colorado on Feb. 28. Source: <\/em>ETHDenver<\/em><\/a><\/p>\n<\/figcaption><\/figure>\n

The leader of the crypto-friendly bank remarked that the White House must appoint a new chair to guide the Federal Deposit Insurance Corporation, which, according to Long, has generally resisted adapting<\/a> to technological advancements for nearly 15 years under Martin Gruenberg\u2019s oversight.<\/p>\n

\u201cThis is the reason why the banking system is so outdated in this nation, as we\u2019ve had someone uninterested in any modifications for the past 15 years.\u201d<\/p><\/blockquote>\n

Gruenberg, who was succeeded by Acting Chair Travis Hill on Jan. 20, faced accusations of being one of the primary architects of \u201cOperation Chokepoint 2.0\u201d \u2014 a supposed federal initiative to debank crypto<\/a> enterprises.<\/p>\n

Long recognized that the Securities and Exchange Commission<\/a> has executed a \u201cmassive turnaround\u201d on its crypto approach \u2014 and is anticipating a similar transformation in banking regulations.<\/p>\n

Related: <\/strong><\/em>Shifting political landscape brings immense crypto opportunities \u2014 US Rep. Steil<\/strong><\/em><\/a><\/p>\n

One day after the inauguration of US President Donald Trump on Jan. 20, the SEC initiated a Crypto Task Force<\/a> led by SEC commissioner Hester Peirce to advocate for this novel strategy.<\/p>\n

The SEC notably revoked a contentious rule, Staff Accounting Bulletin 121, which mandated that financial institutions holding crypto must classify them as liabilities on their balance sheets.<\/p>\n

Long also aspires for the US to enact long-awaited stablecoin regulations<\/a> soon but insists on implementing stronger consumer safeguards \u2014 primarily ensuring that banks maintain cash reserves.<\/p>\n

\u201cThe typical bank in the United States currently keeps 8 cents in cash against every $1 of demand deposits\u2026 That is inherently unstable and particularly vulnerable to a bank run.\u201d<\/p><\/blockquote>\n

\u201cIn the crypto sector, I think we\u2019ve realized that this business model is unviable,\u201d Long remarked, referring to the Silvergate Bank demise.<\/a><\/p>\n

To effectively safeguard consumers, stablecoin issuers must be mandated to hold cash to back the stablecoin obligation, Long asserted.<\/p>\n

Magazine:<\/strong><\/em> Elon Musk’s proposal to govern via blockchain faces significant challenges<\/strong><\/em><\/a><\/p>\n