Crypto Banking in US: Stagnant Under Trump, Long Urges 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 any of the anti-crypto guidance. She stated that it is still presumed unsafe and unsound for a bank to engage with digital assets, even in a minimal capacity. 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 Greenberg. Long suggested that the appointment of a new chair to lead the FDIC could help drive progress in the banking sector.

Long acknowledged that the Securities and Exchange Commission (SEC) has made significant strides in its crypto policy, but she is waiting for a similar shift in banking regulation. She hopes that the US will pass long-awaited stablecoin legislation soon, but with stronger consumer protections in place, such as requiring banks to hold more cash to back stablecoin liabilities.

Long's comments come as the crypto industry continues to grapple with regulatory uncertainty and the fallout from the collapse of Silvergate Bank. As the industry grows and evolves, it is crucial for regulators to adapt and provide clear guidance to support innovation while protecting consumers.