Unchained Caitlin Long on Why the Fed’s Rejections of Custodia Bank Seem Politically Motivated - Ep. 687
Aug 13, 2024
Caitlin Long, Founder and CEO of Custodia Bank, and Michelle Kallen, Partner at Jenner & Block, delve into Custodia's struggle against the Federal Reserve’s denial of its master account application. They argue the rejection was politically motivated and discuss its implications for the future of crypto banking. The duo also touches on the lack of women-owned banks, biased regulatory practices, and the significance of their ongoing lawsuit. Their insights shed light on the complex interplay between innovation, regulation, and politics in the crypto sector.
AI Snips
Chapters
Transcript
Episode notes
Politically Motivated Crackdown
- The increasing difficulty for crypto businesses to access banking services suggests a politically motivated crackdown on the industry.
- This is evident in the way Custodia Bank's application for a Fed master account was handled.
Custodia's Origin Story
- Caitlin Long aimed to solve the "debanking" problem in the crypto industry, where law-abiding companies struggled to maintain bank accounts.
- Tether's creation was partly due to a bank being debanked, highlighting the historical struggle of crypto companies accessing banking services.
States Drive Innovation
- State-chartered banks often drive innovation, as seen with Custodia's model.
- Federal regulators, prioritizing only safety and soundness, often hinder tech innovation, unlike states which also focus on economic development.