FULL STORY: The Fed's explanation of why it rejected Custodia's membership bid eviscerated the bank, its proposed practices and even the potential impact it could have on the crypto industry as a whole. cheyenneligon and jesseahamilton report
Rationale for Custodia’s denial
The Fed explained that it has several factors it uses to evaluate an application, from managerial ability to financial strengths, and it argued that the results in each were “so adverse as to present sufficient grounds on their own for warranting denial of the application.” The membership was denied without prejudice, meaning that Custodia would, in theory, be able to apply again in the future.The central bank’s criticism of Custodia seemed to go well beyond its own business. Crypto industry observers will be paying close attention to the Fed’s language on stablecoins – those tokens, generally tied to stable assets such as the dollar, that are the lifeblood of cryptocurrency trading.
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