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Caitlin Long slams US Fed over stablecoin policy favoring big banks

Caitlin Long, founder and CEO of Custodia Bank, has criticized the US Federal Reserve for quietly maintaining a key anti-crypto policy that favors big-bank-issued stablecoins, despite relaxing crypto partnership rules for banks.

In an April 27 thread on X, Long explained that while the Fed recently rescinded four prior crypto guidelines, it left intact a Jan. 27, 2023, statement issued in coordination with the Biden administration.

The guidance, according to Long, blocks banks from engaging directly with crypto assets and prohibits them from issuing stablecoins on permissionless blockchains.

“THE FED HAS MAINTAINED A REGULATORY PREFERENCE FOR PERMISSIONED STABLECOINS (ie, big-bank versions),” Long stated.

She warned that this move gives traditional financial institutions a “head start” in launching private stablecoins while the broader market waits for stablecoin legislation to pass through Congress.

Caitlin Long slams US Fed over stablecoin policy favoring big banks
Caitlin Long criticizing the Fed’s preference for permissioned stablecoins. Source: Caitlin Long

Long urges Congress to pass stablecoin bill

Long noted that once a federal stablecoin bill becomes law, it could override the Fed’s stance. “Congress should hurry up,” she urged.

Beyond stablecoins, Long pointed out how the Fed’s policy hampers banks from participating in crypto markets as principals, preventing them from market-making in assets like Bitcoin (BTC), Ether (ETH) or Solana (SOL).

Related: US banks are ‘free to begin supporting Bitcoin’

She also noted operational challenges for banks looking to offer crypto custody services, particularly around covering gas fees for onchain transactions — a standard practice for crypto custodians but restricted under current Fed rules.

Summing up her concerns, Long argued that the Fed’s decision keeps “sand in the wheels” of banks entering crypto custody, while simultaneously advancing permissioned stablecoins backed by major financial institutions.

“The Fed definitely won on PR spin–its press release listed a long list of guidance it rescindedbut omitted ANY mention of the guidance it kept. That duped *a lot* of smart people, understandably,” she wrote.

Related: Fed’s Powell reasserts support for stablecoin legislation

Senator Lummis calls Fed’s move as “lip service”

Senator Cynthia Lummis, a vocal supporter of digital assets, also condemned the Fed’s move as mere “lip service,” signaling potential legislative pushback in the near future.

Lummis mentioned the Fed’s policy statement in Section 9(13), which hasn’t been withdrawn, stating that Bitcoin and digital assets are considered “unsafe and unsound.”

Caitlin Long slams US Fed over stablecoin policy favoring big banks
Senator Cynthia Lummis criticizing the Fed. Source: Senator Cynthia Lummis

However, other crypto executives praised the Fed’s announcement as a positive development for the industry. Strategy’s Michael Saylor said in an April 25 X post that the Fed’s move means that “banks are now free to begin supporting Bitcoin.”

Magazine: Financial nihilism in crypto is over — It’s time to dream big again

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Lib Dems eye Labour-held cities as they target ‘seats not votes’

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Lib Dems eye Labour-held cities as they target 'seats not votes'

They demolished most of the “blue wall” at the general election, and now the Lib Dems are eyeing up Labour voters.

Strategists see an opportunity in younger people who, over the course of this parliament, may be priced out of cities and into commuter belt areas as they seek to get on the housing ladder or start a family.

Insiders say the plan is to focus more on the cost of living to shift the party’s appeal beyond the traditional southern heartlands.

“There’s a key opportunity to target people who were 30 at the last election who over the next five years might find themselves moving out of London, to areas like Surrey, Guildford,” a senior party source told Sky News.

“We also need to be better at making a case for a liberal voice in urban areas. We have not told enough of a story on the cost of living.

“We need a liberal voice back in the cities – areas like Liverpool, where there is strong support at a council level that we can use as a base to build on.”

Liverpool is a traditional Labour heartland but in January lost its first local authority by-election there in 27 years to the Lib Dems.

More on Liberal Democrats

Carl Cashman, the leader of the Lib Dems on the city council, says it’s a result that shows the potential to make gains in areas where the party came third and fourth at the general election.

Carl Cashman is the leader of the Liverpool Liberal Democrats
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Carl Cashman is the leader of the Liverpool Liberal Democrats

“One of the cases I have been making to the national party is that Liverpool should be a number one target.

“We are almost at the end of the road when it comes to the Conservatives, so we need to start looking at areas like Liverpool,” he said, adding that Manchester, Sheffield and Newcastle could also be ripe for the taking.

However, the party faces a challenge of making a case for liberalism against the rising tide of populism.

Sir Ed Davey, the party leader, is trying to position himself as the only politician who is not afraid of holding Reform UK leader Nigel Farage to account.

He has recently unveiled a plan to cut energy bills by changing how renewable projects are paid for and says he will boycott Donald Trump’s state dinner. It is these green, internationalist policies that insiders hope can hoover up support of remaining Tory moderates unhappy with the direction of Kemi Badenoch’s party and progressive voters who think Labour is more of the same.

However, strategists admit it is difficult to cut through on these issues in a changing media landscape, “when you’re either viral or you’re not”.

‘Silly stunts’ here to stay

Farage has no such problem, which Davey has blamed on a national media weighted too heavily in favour of the Reform UK leader, given the size of his party (he has just four MPs compared to the Liberal Democrats’ 72).

But the two parties have very different media strategies. This week, on the same day Farage held a Trump-style press conference to announce his immigration deportation plans, with a Q&A for journalists after, the Liberal Democrat leader went to pick strawberries in Somerset to highlight the plight of farmers facing increased inheritance tax.

Sir Ed Davey takes part in strawberry picking with Tessa Munt, the MP for Wells & Mendip Hills. Pic: PA
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Sir Ed Davey takes part in strawberry picking with Tessa Munt, the MP for Wells & Mendip Hills. Pic: PA

Some Lib Dems have questioned whether the “silly stunts” that proved successful during the general election are past their shelf life, but strategists say there will be no fundamental change to that, insisting Sir Ed is the “genuine nice guy” he comes across as and that offers something different.

The Lib Dems ultimately see their strength as lying not in the “airwaves war” but the “ground war” – building support on the doorstep at a local level and then turning that into seats.

“Our strategy is seats, not votes. Theirs is votes, not seats,” said the party source, suggesting Farage’s divisiveness might backfire under a first past the post system where people typically vote against the party they disklike the most.

“The next election won’t be about who is saying the meanest things.”

‘Don’t underestimate us’

There is broad support within the party behind that strategy. Cllr Cashman said a greater use of social media could help attract a younger demographic, along with putting forward “really fundamental, powerful liberal ideas” on issues such as housing.

But he said Davey is “never going to do the controversial things Farage does”.

“The way we reach people, the traditional campaigning, is what makes us strong. Just because we are not always on the airwaves, do not underestimate us.”

Reform UK leader Nigel Farage. Pic: PA
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Reform UK leader Nigel Farage. Pic: PA

For Liberal Democrat peer and pollster Dr Mark Pack, there are reasons to be confident. On Friday, the party won a local council by-election in Camden, north London – “Sir Keir Starmer’s backyard” – with a swing from Labour to the Lib Dems of 19%.

It is these statistics that the party is far more focused on than national vote share – with Labour’s misfortunes opening an opportunity to strategically target areas where voters are more likely to switch.

“One of the lessons we have learned from the past is that riding high in opinion polls doesn’t translate into seats.

“We are really focused on winning seats with the system in front of us. There is a route to success by concentrating on and expanding on what we have been good at.”

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Tories call for investigation into Angela Rayner over her tax affairs

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Tories call for investigation into Angela Rayner over her tax affairs

Deputy Prime Minister Angela Rayner should face an ethics inquiry over her tax affairs, the Conservatives have said.

It comes after The Daily Telegraph claimed Ms Rayner, who is also housing secretary, avoided £40,000 in stamp duty on a second home in East Sussex by removing her name from the deeds of another property in Greater Manchester.

Stamp duty is a tax paid in England and Northern Ireland when someone buys a property over a certain price.

The newspaper also claimed Ms Rayner previously suggested the Greater Manchester home remained her primary residence, saving around £2,000 in council tax on her grace and favour home in central London.

Conservative chairman Kevin Hollinrake has written to the independent adviser on ministerial standards, Sir Laurie Magnus, requesting he investigate whether Ms Rayner broke ministerial rules.

In a letter to Sir Laurie, Mr Hollinrake described Ms Rayner’s arrangements as “hypocritical tax avoidance, by a minister who supports higher taxes on family homes, high-value homes and second homes”.

As housing secretary, Ms Rayner is responsible for overseeing council tax and housing policy.

More on Angela Rayner

Read more from Sky News:
Lib Dems eye Labour-held cities as they target ‘seats not votes’
Three arrests in Epping ahead of more protests

Mr Hollinrake said the statements she had given on her residency were “contradictory”, but conceded she had broken no laws.

A spokesperson for Ms Rayner has said she “paid the correct duty” on the purchase “entirely properly” – and “any suggestion otherwise is entirely without basis”.

A Cabinet Office spokesman added that Ms Rayner “has followed advice on the allocation of her official residence at all times”.

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Richard Tice defends Reform ban on local newspaper in free speech row

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Richard Tice defends Reform ban on local newspaper in free speech row

Reform UK’s deputy leader has defended a ban on a local newspaper handed down by a council leader in a free speech row.

Nottinghamshire County Council leader Mick Barton banned its Reform councillors, who hold 41 of 66 seats, from speaking to journalists from the Nottingham Post, its digital site Nottinghamshire Live and its local democracy reporters on Tuesday.

This came after the newspaper published an article reporting on two Reform councillors allegedly saying they could face suspension if they did not back Mr Barton’s preferred structure for the reorganisation of the council.

Richard Tice, Reform’s deputy leader, has defended the ban, telling Sky News’ presenter Jonathan Samuels that Nottinghamshire Live “distorts and completely acts in an irresponsible way” and therefore councillors were “entitled to say ‘we’re going to talk to other parts of the media, not yourselves'”.

When challenged that this was going against the principle of democracy, Reform UK’s deputy leader replied: “That’s the whole point of a democracy. You pick and choose who you speak to, and sometimes you speak to friends, sometimes you don’t.

“But it is equally that a media organisation does have a responsibility also to present some things in a sensible way, presenting both sides of a debate or an argument. And that was the issue.”

Natalie Fahy, senior editor at Nottinghamshire Live, told Sky News she was “absolutely gobsmacked” by Mr Tice’s comments, as he “knows absolutely nothing about what the Nottingham Post publishes day in day out”.

More on Reform Uk

She said: “As a newspaper regulated by IPSO (Independent Press Standards Organisation), we are actually allowed to be biased if we want to be, but we try to maintain an overall balance on our coverage (…) We’ve not distorted any facts whatsoever.”

Mr Tice said he wants to be held to account by people "who are not completely distorted and biased"
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Mr Tice said he wants to be held to account by people “who are not completely distorted and biased”

Mr Tice was asked whether he only wanted to be held to account by people that he likes and agrees with. He replied: “I want to be held to account by people who are going to be rational, sensible and not completely distorted and biased.”

“That’s not a democratic society, that’s not free press. Sometimes there is going to be negative stuff, and sometimes we will be going to have to criticise stuff. It’s very dangerous what he (Mr Tice) said – you can’t just have a positive, unquestioning press,” Ms Fahy warned.

She added that the Nottingham Post was not an anti-Reform publication and that its journalists appreciate that many of their readers vote for Reform. “We just want to find out on behalf of our readers what they voted for,” Ms Fahy said.

‘Rehearsal for Nigel Farage’s government’

Ms Fahy, who alerted Mr Tice to the ban before he spoke to Sky News on Friday, urged Nigel Farage to get involved.

“This is a rehearsal for Nigel Farage’s government – he needs to step in and say that this is not acceptable behaviour if he wants to be taken seriously,” the senior editor warned.

But Mr Tice indicated that Mr Farage would not wade into the row, saying: “It’s a local row and I’m sure they’ll sort it out.”

The ban might not end with the Nottingham Post, as Mr Barton, the Nottinghamshire County Council leader, warned his party would also “not be engaging with any other media outlet we consider to be consistently misrepresenting our politics, actions, or intentions”.

Nigel Farage
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Nigel Farage

As part of the ban, the authority will also stop sending press releases to the outlet and won’t invite them to council events, although it cannot prevent them from attending public meetings.

Ms Fahy published an opinion piece after the ban was announced, telling readers: “Reform UK makes huge noises about respecting free speech, transparency, honesty and being straight-talking. This boycott flies in the face of all of that. When the press is not welcome, you know democracy itself is in danger.

“If we’re heading for a Reform government, you’ll see this echoed on the national stage. And maybe at some point, people will look back and wonder where it all started. If we don’t fight back against this authoritarian edict, we’re heading down a very dark and dangerous path for everyone in this country.

“Grow up Mick Barton, and start accepting a free press is there to hold you and your councillors to account. You’ve got my number and I am waiting for your call.”

‘Not just press being shut out’

The leader of the opposition at Nottinghamshire County Council, Conservative councillor Sam Smith, said on X: “The free press play a key role in keeping residents informed of actions being taken by decision makers and in return the press express the views of residents to the politicians and public in publishing balanced articles.

“As a leader of the county council, I welcomed that scrutiny. Sometimes it was tough reading, but it helped ensure my team and I were always focused on delivering on the priorities of local residents.

“It’s not just the press Reform are shutting out in Nottinghamshire. It’s the voice and views of residents.”

Mr Barton said the decision had not been made “lightly”, adding: “It is not about silencing journalism, it is about upholding the principle that freedom of speech must be paired with responsibility and honesty.”

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