Caitlin Long, CEO of Custodia Bank, has accused the Federal Reserve (FED) of exhibiting bias in its stablecoin policy, favoring stablecoins issued by large, established banks. This criticism comes despite recent easing of cryptocurrency partnership regulations for banks. Long argues that while the FED appears to be opening up to crypto, significant restrictions remain. Banks are essentially blocked from direct engagement with cryptocurrencies and, crucially, are prohibited from issuing stablecoins on permissionless (public) blockchains. This creates an uneven playing field, hindering innovation from smaller institutions and crypto-native companies. According to CoinTelegraph, Long believes a federal stablecoin bill is crucial to rectify this imbalance and ensure fair competition. This echoes previous concerns raised by Senator Cynthia Lummis, who criticized the FED's revocation of bank cryptocurrency activity reporting obligations as insufficient. The core issue, according to Custodia, is that the current regulatory landscape effectively protects larger banks while stifling innovation in the broader stablecoin ecosystem. ```