Politics

Why Sunak’s new promise after Rwanda ruling looks extremely hard to keep

Published

2 years ago

November 15, 2023

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It was the prime minister’s day in court today, and he really needed a win.

Instead, the linchpin of his immigration plan – to send asylum seekers to Rwanda – is not just loose but lost.

For a leader who has said, on repeat, that he will stop the boats, Rishi Sunak had little option after this almighty setback to double down on the plan.

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Appearing before the media after losing this case in the Supreme Court, Mr Sunak sounded determined and tough: Rwanda not safe for migrants? No matter – parliament will pass emergency laws to declare it safe and will disapply international law, such as the European Convention on Human Rights, when it comes to the government’s Rwanda policy.

And then there was this promise to voters: “Flights will be heading off in the spring as planned.”

It was tough talk and a clear plan but stop for a few minutes and you ask yourself: is this a prime minister on rinse and repeat, trying to change laws only to get bogged down, again?

First, if the Supreme Court says Rwanda isn’t a safe country, you can’t simply pass a law that says it is.

The prime minister might be able to push it through the Commons with his majority, but the House of Lords may well not want to vote to put anyone in harm’s way.

The suggestion by Mr Sunak that this is all straightforward is disingenuous to say the least.

When I suggested to one government adviser that the prime minister might not be able to guarantee flights next spring given the legislative hoops he needs to jump through, they argued: “The Lords question is a question for Labour, not us – will they accept the will of parliament and the people that we must stop the boats?”

I suspect the answer to that will be a “no” and this will be neither a quick or easy process.

Then there is the question of any domestic laws the prime minister does pass being challenged in the European Court of Human Rights in Strasbourg.

Now, on that, the UK-Rwanda treaty might help, says former head government lawyer Jonathan Jones.

That’s because Strasbourg could issue an interim “rule 39” order to say the UK can’t allow flights to take off – as it did earlier this year – but it sounds like the prime minister would ignore it.

But what all of the above points to is that this is no quick fix and that matters politically, because the one big takeaway I heard from that media conference was that the flights will get off the ground next spring.

Those on the right of the party will be led by Suella Braverman agitating for the prime minister to withdraw from the ECHR now and get the flights going or face a new Tory civil war. The stakes could not be higher.

A prime minister’s announcement on next steps today raises more questions than it answers, while his new promise still, for now, looks extremely hard to keep.

When the history of the Sunak government is written, will “stop the boats” be remembered as an election-winning slogan or Mr Sunak’s political epitaph?

Politics

US Fed pulls guidance blocking its banks from engaging with crypto

Published

5 hours ago

December 18, 2025

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US Fed pulls guidance blocking its banks from engaging with crypto

The US Federal Reserve has withdrawn a 2023 guidance that limited how Fed-supervised banks, including uninsured ones, engaged with crypto, as US regulators continue to pivot positively toward digital assets.

The 2023 guidance required uninsured banks to follow the same rules as federally insured institutions, based on the principle that similar activities pose similar risks and should be subject to identical regulation.

This prevented uninsured banks from engaging in activities that weren’t permitted for national banks, like crypto services, which automatically disqualified Fed membership because the institution’s primary activities weren’t allowed.

Fed says financial system has evolved since 2023

The Fed said a key reason for withdrawing the guidance was that it was outdated and “the financial system and the Board’s understanding of innovative products and services have evolved.”

“As a result, the 2023 policy statement is no longer appropriate and has been withdrawn,” it said.

Caitlin Long, the CEO of the crypto‑focused Custodia Bank, applauded the move in an X post on Wednesday, explaining the 2023 guidance was why her institution’s application for a master account was previously denied.

A master account with the Fed enables a financial institution to hold balances directly with the US central bank and access its core payment systems, allowing for payment settlement in central bank money rather than relying on another bank as an intermediary.

“The Fed broke the law by citing this very guidance in the Custodia denial, even tho the guidance hadn’t become official yet, that didn’t happen until Feb 2023,” Long said.

“But most of that team is now gone or out of power at the Fed. Nature is healing. Thank you VCS Bowman & Gov Waller!” she added.

New guidance to boost bank innovation

The move on Wednesday came as the Federal Reserve issued new guidance to establish a formal pathway for both insured and uninsured Federal Reserve-supervised state member banks to pursue “innovative activities,” such as cryptocurrencies, provided risk-management expectations are met, according to a statement on Wednesday by the Fed.

Fed vice chair for Supervision Michelle Bowman said that by “creating a pathway for responsible, innovative products and services, the Board is helping ensure that the banking sector remains safe and sound while also modern, efficient, and effective.”

Fed decision wasn’t unanimous

Fed Governor Michael Barr dissented to the decision, arguing that the principle of equal treatment among banks helps maintain a level playing field and prevents regulatory arbitrage.

“This principle continues to hold true today. Therefore, I cannot agree to rescind the current policy statement and adopt a new one that would, in effect, encourage regulatory arbitrage, undermine a level playing field, and promote incentives misaligned with maintaining financial stability. I dissent,” he said.

Barr has been accused of being linked to Operation Chokepoint 2.0, a federal effort to debank crypto companies. However, he was also previously an adviser at Ripple and has pushed for responsible stablecoin regulation.

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