Sen. Lummis Likely to Oppose Powell’s Fed Nomination on Crypto Grounds

The Wyoming senator is likely to vote against President Biden’s nominees to head the U.S. Federal Reserve, and will rally other senators against them, said a Lummis aide.

AccessTimeIconDec 1, 2021 at 8:55 p.m. UTC
Updated Dec 1, 2021 at 9:20 p.m. UTC

Michael Bellusci is CoinDesk's crypto reporter focused on public companies and digital asset firms.

Crypto-friendly U.S. Sen. Cynthia Lummis (R-Wyo.) has expressed significant concerns about the crypto track records of President Joe Biden’s nominees to head the Federal Reserve for its next term, current Fed Chair Jerome Powell and Fed Governor Lael Brainard.

As a result, Lummis is likely to oppose the nominations and rally other senators against them unless the Fed addresses her concerns, an aide to Lummis told CoinDesk.

The Republican senator wrote in an op-ed in Tuesday’s Wall Street Journal that “over the past year my faith in the Fed has been deeply shaken by its political approach to digital assets in my home state.”

She explained that Wyoming created a heavily regulated bank structure called a special purpose depository institution, or SPDI, in 2019, and began discussing with the Fed whether these vehicles could be considered banks and gain access the federal payment system.

But the two Wyoming-based institutions that received SPDI charters in 2020 – crypto exchange Kraken and bank and stablecoin issuer Avanti – have not yet been approved by the Fed, which says it’s still determining whether they qualify as banks.

Lummis says the delay amounts to a legal violation because in 1994 the Congress required the Fed to act on all bank applications within a year.

The senator wrote that, as a result, she’s “deeply concerned” about Powell and Brainard’s nominations, though she called them both “smart and qualified.”

She continued, “But while Mr. Powell and Ms. Brainard have said they want to promote responsible financial innovation, when Wyoming provided a perfect opportunity the Fed instead inexplicably chose to ignore its legal obligations. I want to know why but haven’t received an answer.”

CORRECTION (Dec. 1, 18:59 UTC): A previous version of this story incorrectly stated that Lummis’ op-ed was published on Wednesday.

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Michael Bellusci is CoinDesk's crypto reporter focused on public companies and digital asset firms.

CoinDesk - Unknown

Michael Bellusci is CoinDesk's crypto reporter focused on public companies and digital asset firms.