Senator for Wyoming Cynthia Lummis has claimed that the Federal Reserve is violating the law by postponing the processing of applications from crypto-native banks to receive accounts at the central bank.
The senator has claimed that the Fed was treating the Special Purpose Depository Institutions also known as blockchain banks, in her home state unfairly. She called on her Republican colleagues to withhold support for Fed chair Jay Powell who was reappointed by President Biden.
Wyoming state legislature in 2019 ,approved SPDIs to serve businesses that are incapable to secure banking services from the Federal Deposit Insurance Corporation due to their dealings with crypto.
In 2020, two Wyoming SPDIs Kraken and Avanti received their bank charters. Shortly after, they applied for master accounts with the Federal Reserve Bank of Kansas City. Their applications approval is currently pending.
The state has been in discussions whether SPDIs should be considered banks under federal law. Lummis claimed that SPDIs should without a doubt be considered banks under federal law .She also added that SPDIs meet the standard set by Congress in the Federal Reserve Act for what constitutes a bank.
