Lummis Blasts Fed’s “Crypto Pivot” as Empty Gesture

The champagne corks were barely out of the bottle before Senator Cynthia Lummis poured cold water on the party.

On Apr. 24 the U.S. Federal Reserve quietly scrapped its 2022 supervisory letter—the memo that had warned banks off stablecoins and most crypto dealings. Within hours, Bitcoin evangelists cheered the “green light” for traditional finance. Strategy’s Michael Saylor hailed a new era: “Banks are now free to begin supporting Bitcoin.”

Not so fast, says Lummis.

In a blistering thread the Wyoming Republican—best known for championing the 2024 Bitcoin Strategic Reserve Bill—called the Fed’s move “just noise, not real progress.” She argued the central bank still wields plenty of informal levers to choke crypto activity, from the elusive master-account approval process to examiners’ reliance on “reputational risk” when grading bank portfolios. Those tools, she claims, enabled the 2023-24 Operation Chokepoint 2.0 pressure campaign that pushed multiple crypto-friendly banks to the brink.

“We are NOT fooled,” Lummis wrote. “The Fed assassinated companies within the industry and hurt American interests by stifling innovation and shuttering businesses.”

Her evidence: Section 9(13) of the Fed’s own policy statement—unchanged by Wednesday’s announcement—still labels many digital-asset activities “unsafe and unsound.” If the supervisory letter was a lock on the door, Section 9(13) is the padlock the Fed left hanging, she argued.

A divide in the crypto chorus

Custodia Bank founder Caitlin Long echoed Lummis: “THANK YOU for seeing this for what it is.” Long has fought a multi-year legal battle for a Fed master account—permission that would let her bank clear payments directly through the central bank system instead of relying on an intermediary.

But others in the industry see a meaningful thaw. Anthony Pompliano framed the rollback as proof that “Bitcoin is becoming apolitical infrastructure.” Anastasija Plotnikova, CEO of regulatory firm Fideum, told Cointelegraph the move “simplifies the path to institutional adoption” by removing at least one layer of red tape.

For banks, the short-term picture remains murky. The Federal Deposit Insurance Corporation is drafting a rule to bar examiners from citing reputational risk—another win for crypto, if finalized. Yet until the Fed revises Section 9(13) and clarifies its master-account criteria, compliance officers may still balk at onboarding digital-asset clients.

Policy chess continues

Lummis pledges to keep pressing Chair Jerome Powell. She wants explicit guardrails that allow banks to handle custody, stablecoin settlement, and crypto collateral without fearing a punitive “matters-requiring-attention” letter from examiners. The Fed, meanwhile, appears to be balancing a tightening election-year agenda with a growing chorus of lawmakers calling for clear, innovation-friendly rules.

The Fed’s step back from its 2022 guidance is undeniably a shift—symbolic or substantive depends on whom you ask. For developers and bankers alike, the message is that U.S. crypto policy remains a work in progress, written as much on social-media timelines as in the Federal Register.