Caitlin Long, the founder and CEO of Custodia Bank, has criticized the US Federal Reserve for maintaining a policy that favors big-bank-issued stablecoins while relaxing crypto partnership rules for banks. In a thread on X, Long highlighted the Fed’s decision to rescind four prior crypto guidelines but retain a statement from January 27, 2023, which prohibits banks from engaging with crypto assets and issuing stablecoins on permissionless blockchains. Long emphasized the Fed’s preference for permissioned stablecoins issued by big banks, giving them an advantage over the broader market waiting for stablecoin legislation. She urged Congress to pass a stablecoin bill to override the Fed’s stance. Long also pointed out how the policy hinders banks from participating in crypto markets and offering custody services due to operational challenges and restrictions on covering gas fees for on-chain transactions. Senator Cynthia Lummis condemned the Fed’s move as “lip service,” suggesting potential legislative pushback. However, some crypto executives viewed the Fed’s announcement positively, with Michael Saylor stating that banks are now free to support Bitcoin. The industry awaits further developments as the debate around stablecoin policy intensifies in the US.