1/ A 🧵ON THE @federalreserve's precedent-setting 86-page @custodiabank order, released on Friday. Custodia just published a blog post highlighting the newly-articulated Fed policies + the procedural abnormalities it reveals.
custodiabank.com/press/custodia…
2/ First, the policy items. Here are the first two:
3/ The third is new & raises lots of questions, esp since the Fed appears to have made a significant break from the President's Working Group's recommendation that #stablecoins only be issued by banks. There may be a new "catch 22" here:
4/ Related, there's increasing chatter about the Fed's own #CBDC project in the context of the Fed's actions regarding Custodia:🤔
5/ As I've said in recent interviews I've seen no evidence that the coordinated #crypto crackdown is about clearing the runway of private competitors to a #CBDC. But chatter about the topic is growing louder.
Speaking *personally* a U.S. retail CBDC is a hill worth dying on.
6/ The fourth gets into the role of States in the dual banking system, where both States & the federal govt (the OCC) have equal power to charter banks. The Fed just opened a new chapter in long tug-of-war re: Washington DC's efforts to federalize banking. States may take issue:
7/ The fifth is related--the Fed created a de facto new standard that all Fed member banks must be FDIC-insured (a "critical tool in preventing bank runs"). Hmmm...interesting in light of the bank runs at FDIC-insured banks that unfolded just weeks after the Fed wrote the order🤷♀️
8/ Next is a discussion of the procedural abnormalities--a few of which @custodiabank details in its post. (Here's a live link to the banking law expert's analysis referred to in the screenshot: bankregblog.substack.com/p/four-things-…)
9/ Banks especially may find these noteworthy:
10/ continuing...
11/ Per @custodiabank: "There are many other procedural abnormalities, but the above are likely the ones most relevant to other banks combing the Fed’s precedent-setting order for clues as to how the Fed will approach its future disclosure of confidential supervisory information"
12/ And on the topic of Fed disclosure of confidential supervisory information (CSI), here's what Fed vice chair Barr said just today (!)👇Compare his statement to the magnitude of CSI disclosure in the 86-page @custodiabank order. #WatchWhatIDoNotWhatISay
federalreserve.gov/newsevents/tes…
13/ Here's the closing of @custodiabank's blog. "#digitalassets are not going away, and neither is Custodia." As always, thanks for all of your support! 💪
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