According to the WSJ, a Republican-backed bill aims to end crypto debanking. Senator Tim Scott leads the bill amid rising concerns over Operation Chokepoint 2.0 and crypto suppression.
What does this mean for crypto firms, and why is crypto debanking such a big deal?
What’s the Deal with Debanking?
Debanking lets financial institutions cut ties with high-risk or controversial companies. The Federal Reserve defines reputational risk as potential harm from negative publicity. This harm can impact an economic organization. Over the years, various industries have faced debanking. These include firearms, cannabis, and federal prison contractors. Now, many believe crypto companies are the latest target.
Happening now: Senate Republicans are voting to legalize debanking by voting to remove a CFPB rule than bans payment apps from banning people without cause.
I don’t want to hear the GOP call themselves the free speech party ever again.
Watch LIVE 👇🏻 https://t.co/QpJmhrt2iD
— Laura Loomer (@LauraLoomer) March 5, 2025
Crypto advocates argue that genuine crypto companies face unfair discrimination. They claim banking institutions restrict their ability to operate in the United States. Many observers claim the Biden administration is working against crypto. They believe it aims to limit access to traditional banking systems. This alleged effort is “Operation Chokepoint 2.0.”
The GOP Steps In
In response to these concerns, Senator Tim Scott is taking action. As head of the U.S. Senate Banking Committee, he plans to introduce a bill preventing banks from debanking customers based on reputational risks. The draft of the bill has gained support from 11 Republican lawmakers and several banking industry groups. Chase stands together with financial organizations to back up this initiative. The issue has already received efforts from researchers to find solutions.
In February 2025, Senators Kevin Cramer and John Kennedy proposed new legislation. Their goal is to guarantee reasonable banking access. The ACLU joins others in opposing banks restricting financial access.
What’s Next for Crypto Banking?
Many hoped crypto banking would improve under the new administration. However, Custodia Bank’s Caitlin Long recently stated that nothing has changed. She spoke at ETHDenver on February 28. She noted that federal banking agencies had not reversed their anti-crypto policies.
🇺🇸 Custodia Bank CEO Caitlin Long criticizes US government’s inaction on crypto debanking.
Despite a perceived policy shift, federal banking agencies have not reversed anti-crypto regulations. pic.twitter.com/EuNJvGhwcQ
— invΞst00®️ 🏁 (@investinbit) March 2, 2025
With Senator Scott’s bill set to take effect on March 6, the fight against crypto debanking is heating up. The proposed legislation aims to safeguard crypto businesses from unjust banking service terminations. However, the prospects of this bill becoming an operative law remain uncertain because it lacks active support.
As I warned earlier, looks like the Senate Republicans just successfully passed their measure today to legalize debanking and allow for Payment Apps like PayPal to keep banning people based off their political affiliations.
Senate Republicans are an enemy to free speech and… https://t.co/Wrau9KOQuE pic.twitter.com/sHfasYGkwT
— Laura Loomer (@LauraLoomer) March 6, 2025
Conclusion
The ongoing dispute about crypto debunking persists strongly. The new GOP legislation offers necessary help to crypto companies. However, the existence of Operation Chokepoint 2.0 remains uncertain amid political speculation. The battle for equal banking service access is increasing. Lawmakers and crypto enthusiasts are watching the situation closely.
Disclaimer
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