Anything to do with Laramie, WY’s Caitlin Long is of interest, and she has a great presentation on Bitcoin from a few years ago. Consequently, these stablecoins mentioned are of interest, as there may be a few that create some new cryptocurrencies based on the dollar, using US treasuries as the backing. So basically, you buy a bunch of US debt and then create a cryptocurrency which allows for a lot of fast transacting in essentially US dollars with fees, also allowing you to get your money back from the initial investment. And there is no shortage of US debt to back these creations, with those getting preferential regulation taking the most advantage. Consequently, with modern cryptocurrencies, it’s doing away with the old ways of illegally transacting across borders using diamonds, art, cash…
Custodia Bank fought to service crypto firms under the previous administration but faced resistance from US regulators.
Recent efforts to “debank” crypto firms in the US revealed a “staggering” level of corruption among government officials, and the problem is not yet resolved, one banking executive said in a Feb. 27 interview during Bitcoin Investor Week.
“The magnitude of skullduggery that is happening in Washington D.C. is really incredible… and it’s not over yet,” Caitlin Long, Custodia Bank’s founder and CEO, said during a panel at the event.
In 2023, the US Federal Reserve, which regulates banks, stymied Custodia’s efforts to service crypto firms by denying the bank access to a master account, citing Custodia’s involvement in “crypto-asset-related activities.”
A master account would allow the bank to custody assets directly with the central bank and access payment rails for inter-bank transfers. Custodia took legal action against the Fed in a bid to reverse the decision.
Industry outrage over alleged debanking reached a crescendo when a June 2024 lawsuit spearheaded by Coinbase resulted in the release of letters showing US banking regulators asked certain financial institutions to “pause” crypto banking activities.
US President Donald Trump, who started his term on Jan. 20, has criticized the prior administration’s approach to crypto-friendly banks and vowed to better integrate cryptocurrencies, including stablecoins, into the regulated financial system.
In a Jan. 23 executive order, Trump told agencies to prioritize “fair and open access to banking services” for digital asset firms.
Stablecoin scrum
However, the battle for regulatory clarity isn’t over, Long said. Instead, it has evolved into a multi-directional fight among different types of stablecoin issuers seeking preferential rules, she said.
There is an ongoing “scrum between the big banks… and the incumbent stablecoin issuers, and then there’s Tether,” which is not based in the US, Long said.
The result has been “this incredible flow of money that has gone from the banks and the crypto industry to people in [Washington] D.C., and they’re all going to fight,” Long said.
“I don’t know how it’s going to come out,” she added.