Wyoming’s Republican senator, Cynthia Lummis has called on her colleagues to vote against Fed Chairperson Jay Powell.
Senator Cynthia Lummis of Wyoming, a Republican, claims the Federal Reserve is “violating the law” by delaying the processing of applications from crypto-native banks to open accounts with the central bank.
Lummis alleged in a Wall Street Journal op-ed on Nov. 30 that the Fed was unfairly penalizing Special Purpose Depository Institutions (SPDIs), commonly known as “blockchain banks,” in her home state. She urged her Republican colleagues to vote no on President Biden’s re-appointment of Federal Reserve Chairman Jay Powell on Nov. 23.
The Wyoming state legislature legalized SPDIs in February 2019 to help firms who are unable to obtain banking services from the Federal Deposit Insurance Corporation (FDIC) owing to their cryptocurrency activities.
Kraken and Avanti, two Wyoming SPDIs, will be granted bank licences in 2020. They registered for master accounts with the Federal Reserve Bank of Kansas City not long after. Their applications are still pending.
The state is debating whether SPDIs should be treated as banks under federal law. Lummis asserted in the paper that SPDIs should be designated banks under federal law “without a doubt,” and that “Wyoming checked every box.” She went on to say that SPDIs fit the Federal Reserve Act’s definition of a bank, which was defined by Congress.
She said that the Fed is “in reality breaking the law” by delaying approval of the SPDI, citing federal court rulings that the Fed “has a duty to offer payment system access to all banks and credit unions doing authorized activity.”
Lummis filed records on Oct. 7 showing that on Aug. 16, she acquired an unknown quantity of BTC worth between $50,001 and $100,000.
Lummis made the purchase less than two weeks after she and several senators sought to get President Joe Biden’s infrastructure plan to include a pro-crypto amendment.
