Caitlin Long, founder and CEO of Custodia Bank, criticized the new report shared by the Financial Stability Oversight Council (FSOC) on “concentration risks” in the crypto industry. According to the FSOC report, stablecoins pose a potential risk to financial stability.
Crypto Risk Report
The report writes that the stablecoin market is 70% dominated by a single company. According to the council, the dominance of a single company is a significant risk. It was also emphasized that stablecoin companies operate outside federal regulatory frameworks.
This second point spurred the CEO of Custodia Bank into action. Long noted that regulators’ anti-crypto policies have prevented many banks from serving crypto issuers. He stated that this situation led some stablecoin issuers and crypto companies to withdraw from the US market.
FSOC’s Dilemma
Caitlin Long criticized FSOC’s decision to reduce the number of banks serving the crypto industry, arguing that this behavior was hypocritical. He also said that the FSOC ignores state regulations on stablecoin issuers.
Caitlin Long: “FSOC’s attitude towards state regulators is unacceptable. “Lack of control over stablecoins threatens financial stability.”
After highlighting the FSOC’s inconsistencies, Long stated that he was looking forward to the FSOC’s first report under the Donald Trump administration.
The crypto industry is hopeful that the new Trump administration will be able to shape future regulations in a positive way. The appointment of (crypto-friendly) Scott Bessent to the US Treasury Department will play an important role in regulating banks.
Professional crypto lawyer John Deaton demanded that the new administration investigate Operation Chokepoint 2.0. Trump’s appointment of David Sacks as Crypto and AI Czar indicates that policies towards crypto firms may change.
The crypto industry hopes these developments will have positive impacts on the future of the industry. Organizations can operate in a more stable market with regulatory uncertainties eliminated. Regulation of stablecoins could be an important step towards financial stability.
In the future, the FSOC and other regulatory bodies’ policies towards the crypto industry are expected to become clearer. This process can create a safer environment by reducing uncertainties for players in the industry.
Disclaimer: The information contained in this article does not constitute investment advice. Investors should be aware that cryptocurrencies carry high volatility and therefore risk, and should carry out their transactions in line with their own research.
