Crypto Banking in US Stagnant Under Trump: Caitlin Long Calls for Change

The crypto banking landscape in the United States has remained largely unchanged since the return of former President Donald Trump, according to Caitlin Long, CEO of Custodia Bank. Speaking at ETHDenver on Feb. 28, Long expressed her concerns about the lack of progress in addressing crypto debanking issues.

Long argued that while there is a perception of loosening regulations, none of the federal banking agencies have actually reversed their anti-crypto guidance. She stated that it is still presumed unsafe and unsound for a bank to engage with digital assets, even in small amounts. Long believes that a change in this stance is inevitable, but it has not yet been proposed by the Trump administration.

The CEO of the crypto-friendly bank also criticized the leadership of the Federal Deposit Insurance Corporation (FDIC), which she believes has been resistant to technological change for over a decade under the leadership of Martin Gruenberg. Long suggested that the White House should appoint a new chair to lead the FDIC and drive innovation in the banking sector.

Long acknowledged that the Securities and Exchange Commission (SEC) has made significant strides in its crypto policy, establishing a Crypto Task Force and canceling a controversial rule that required financial firms to record crypto as liabilities on their balance sheets. However, she is still waiting for a similar shift in banking regulation.

Long also emphasized the importance of passing long-awaited stablecoin legislation, but she wants to see stronger consumer protections in place. She believes that stablecoin issuers should be required to hold cash to back the stablecoin liability, as the current business model has proven to be unstable and susceptible to bank runs, as seen in the collapse of Silvergate Bank.