Senator Cynthia Lummis representing has recently called out Federal Reserve in an open letter published in The Wall Street Journal. The letter suggests that the Federal Reserve has been ignoring the application for accepting Master Bank eligibility for the centralized cryptocurrency exchange Kraken and Avanti.
Lummis provided details about the banking policies of the 10th largest US state by area, making amends for higher cryptocurrency inclusion. The Senator claimed that the state is on a mission to integrate cryptocurrencies into the US banking infrastructure. She further claimed the legislative experts of the state have also put together Special Purpose Depository Institution or SPDI to address issues like money laundering and asset custody.
Cynthia Lummis discussing the issue of cryptocurrency banking inclusion, claimed that in 1994, a Federal Law was passed requiring FR to deny or approve the request the applications for banking inclusion within one year of documentation submission. She further stated in her letter that Wyoming State had submitted its application for two years without any response.
It is worth noting that if Federal Reserve grants a Master account option, Kraken and Avanti would not need other banking institutions to hold their fiat reserves. Furthermore, the crypto institutions would also be able to get access to financial services like overnight loans, end-of-day balance maintenance, and reserve balance requirements by the Federal Reserve.
Senator Lummis has been a vocal advocate for cryptocurrencies and Bitcoin. She defends the plans of Wyoming administrators to contribute 5% of the mining output for Bitcoin by 2024. She also played an important role in getting Kraken bank charter approval in 2020 and Avanti in the same year. She criticizes the Federal Reserve’s policy to ignore Master account applications to these crypto agencies despite allowing independent financial firms to act as third-party custody services for crypto to fiat exchange.
It is worth noting that Avanti is also working on issuing a digital dollar version of stablecoin called Avit. Lummis claimed that FR still debating on the matter of SPDIs being a legitimate banking enterprise or not is not a viable legal response from the state department.