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Avanti CEO Caitlin Long is deeply concerned that the US Federal Reserve is stepping up efforts to crack down on the cryptocurrency industry. The founder of the crypto bank fears that the regulator could make the cryptocurrency-related firms’ access to the payment system and bank accounts as difficult as possible or even ban it.
In her alarming tweet, she predicts that the authorities will not target bitcoin and other cryptocurrencies directly but will instead choose to strike at the "intermediaries" and "US$ access points" of the sector.
The Fed has completed the so-called preparatory phase and is now getting ready to take decisive action, Long noted, adding that the "crackdown" on the entire industry has just begun. The point is that the Fed has issued directives that allow the central bank to provide or restrict access to the traditional financial system for companies. The document defines the principles to be used as guidelines when assessing the requests for providing access to the regulator’s services. Thus, Long cited an example of 2017 when a number of banks had closed crypto-related bank accounts. Coinbase analysts also expressed concern over the risks that banks could cease providing services for the industry.
The authorities of Western countries have not yet taken strict measures on this issue as Beijing did. Nevertheless, they are studying China's changing legal framework in dealing with the cryptocurrency sphere. Bitmain co-founder Jihan Wu has no doubt that the Chinese authorities will make every effort not to allow cryptocurrencies to compete with the digital yuan. According to him, it will hardly exert strong pressure on the market. Investors fear that other countries could follow the example of Beijing. However, developed economies will most likely take a cautious approach to restraining cryptocurrency trading and mining and, above all, will probably assess the potential impact of such decisions, he believes.
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