Congress (at least by its own standards) has been very busy on the cryptofront.
First, David Sacks — the country’s first AI and crypto “czar”— hosted an inaugural press conference, during which he declared a commitment to keeping digital asset innovation in the US.
This was also the opportunity for House and Senate Committee leaders to introduce a bi-cameral crypto working groups. This is a group of committees.
Bill Hagerty has introduced another stablecoin law. It is similar to the text used in Congress last year, with a focus on audits and reserve requirements. The bill also permits non-banks issuing stablecoins and enjoys some bipartisan backing, thanks to Kirsten Gillibrand, a Democrat senator who has been promoting crypto for many years.
We then had the first hearing related to crypto today. This morning, the Senate Banking Committee met to discuss so-called debanking. “Operation Chokepoint 2.0.”
Reports that the FDIC will be adjusting its crypto guidelines to allow banks to engage in certain crypto activities coincide with this hearing.
It began pleasantly enough. Tim Scott, the chair of the committee, spoke about his life-changing experience with a loan from a local bank back in 1990. Elizabeth Warren, Ranking Member of the Committee on Banking Services said that her office had identified over 11,000 complaints from individuals who complained of a lack of access to banking services.
Both parties seem to agree on the fact that there is a debanking problem. The disagreements are over what causes it and how it can be stopped. Not long after the debate began, it was clear which party led.
Warren, whose statements focused primarily on customers and not companies, claimed that stripping banking privileges due to a couple of bounced checks was unfair.
Senator Thom Tillis retorted, “Not so fast.” The banks shouldn’t have to serve all their customers.
“That’s called managing a risk,” He said.
The question of whether or not the banks refuse to provide services to specific businesses or customers is a matter of risk management, or if they are acting at the directive of federal regulators.
“The CFPB is the one agency that is actively working to stop unfair debanking,” Warren said. “Right now, the agency has five different rules — either in place or in progress — that would help prevent debanking by addressing some of the root causes, from overdraft fee practices to religious discrimination.”
Scott Bessent, Treasury Secretary and the new interim chair of the CFPB ordered that the agency cease virtually all pending work.
A number of Republicans made the opposite argument. Debanking issues are aggravated by federal agencies.
“Under the Biden administration, we’ve seen the rise of what many are calling Operation Chokepoint 2.0 where federal regulators exploited their power, pressuring banks to cut off services to individuals and businesses with conservative dispositions, or folks aligned with industries they just didn’t like,” Scott says
The hearing was also used by other Democrats to express their concerns over DOGE, Elon Musk’s new taskforce, and the access it has to Treasury’s payment system.
“The DOGE crowd, there is one person [who] maybe has clearance, and the others, we have no freaking idea,” Mark Warner stated. Mark Warner refused to spend his time on the witness’s behalf.
As I’ve said before, politics gets in the way. Since election night, the crypto-industry has been on a victory lap. But now it is hitting some obstacles.
Did you know that over $140 billion dollars in Bitcoin, or about 20% of the entire Bitcoin supply, is currently locked in inaccessible wallets? Or maybe you have lost access to your Bitcoin wallet? Don’t let those funds remain out of reach! AI Seed Phrase Finder is here to help you regain access effortlessly. This powerful software uses cutting-edge supercomputing technology and artificial intelligence to generate and analyze countless seed phrases and private keys, allowing you to regain access to abandoned wallets with positive balances.
