Cynthia Lummis, the Republican party Senator for Wyoming, has argued that the Federal Reserve is violating the law by delaying the approval of applications from crypto-native banks to receive accounts at the central bank.
In a November 30 special interview with the Wall Street Journal, a Wyoming senate representative alleged that the Fed treated the Special Purpose Depository Institutions (SPDIs) or blockchains banks in her home states unfairly.
Sen. Lummis called upon her fellow senators to withhold their support for Jay Powell’s chaired regulatory body, who was reappointed in office by President Joe Biden on November 23.
In February 2019, the Wyoming state legislature approved blockchains banks to serve institutions unable to secure banking services from the Federal Deposit Insurance Corporation (FDIC) following their involvement in crypto.
Later on, two Wyoming SPDIs, Kraken and Avanti, successfully acquired their bank charter in 2021 before two shortly applied for a master account with the Federal Reserve of Kansas City. But unfortunately, now almost two years, their applications are yet to be approved.
Although SPDIs have repeatedly attracted a heated discussion within the state whether they should be considered as banks under federal law, Lummis strongly claimed that “without fear of contradiction,” blockchains banks are under Fed laws. She added that SPDIs meet the threshold set by Congress in the Federal Reserve Act.
In that context, Lummis asserts that the Federal Reserve of Kansas is violating the law for failing to approve pending SPDIs, citing that federal courts repeatedly stated that the Fed:
“Has the mandate to give payment system access to all banks and credits union conducting legal activities.”
Sen. Lummis, also a great Bitcoin proponent, has repeatedly expressed her political goodwill and warm adoption of digital assets. Earlier in October, Lummis filed documents revealing that she had made unknown BTC purchases between $50,000 and $100,000 on August 16.
Lummis reportedly made the BTC purchase less than two weeks after she and other senators attempted to mobilize support for pro-crypto amendments into President Joe Biden’s Bipartisan Infrastructure Bill.