Crypto: U.S. Senate Moves to Tackle Banking Censorship

American lawmakers are writing history in finance. Gone are the old dogmas, welcome to disruptions! After years of ambiguity and hostility towards digital assets, Congress is finally addressing a controversial practice: “debanking.” This banking exclusion targeted several industries, including the crypto market. Republican Senator Tim Scott is sponsoring a bill to put an end to these practices. His goal? To ensure equitable access to financial services and to put a stop to the arbitrary decisions of banks.

The United States Faces the Challenge of “Debanking”: A Politically Tense Battle

While bitcoin suffers from record volatility due to American economic tensions, American lawmakers are taking action. The Republican bill spearheaded by Tim Scott aims to prohibit regulators from blocking bank access for reputational reasons. This is a necessity, according to its supporters, as many crypto companies have been denied financial services under the pretext that they posed a “risk.”

This practice, denounced for years, has notably been highlighted with the “Operation Chokepoint 2.0” case.

This program, referred to by some as a cabal orchestrated by the Biden administration, allegedly targeted various sectors deemed sensitive, ranging from arms manufacturers to crypto companies.

A tweet from December 7, 2024, by Croxxed Out does not mince words:

The concept of debanking is a form of financial ban reminiscent of an authoritarian regime.

This statement aptly illustrates the stakes of this struggle.

The question arises: is this really a deliberate policy by the FED and major banks to restrict certain activities or simple political paranoia?

In any case, Tim Scott’s bill has already received support from at least 11 senators and major financial players, such as JPMorgan Chase. It remains to be seen whether Congress will follow this initiative or if opponents will succeed in blocking the reform.

The Crypto Market in Search of Financial Stability

The crypto industry, already shaken by vague and sometimes hostile regulation, sees in this bill a breath of fresh air. The issue of debanking has emerged as a recurring problem in recent years. Many industry entrepreneurs report difficulties in obtaining traditional banking services, which hampers the development of innovation in the United States.

Marc Andreessen, co-founder of Andreessen Horowitz, recently sounded the alarm on this situation, stating that more than 30 crypto and tech companies have been denied access to banks.

His observation is chilling:

This is a privatized sanctions regime that allows bureaucrats to inflict on American citizens the same treatment we reserve for Iran.

Market advocates argue that banks’ discrimination slows the United States’ competitiveness on the international stage.

Meanwhile, other countries like Switzerland and Singapore are adopting much more favorable policies towards digital assets. The risk is real: if the United States continues down this path, crypto entrepreneurs may well seek refuge elsewhere.

Financial Regulation: An Opportunity to Clarify the Rules of the Game

Behind the issue of debanking lies a broader challenge: that of the financial regulation of digital assets. Tim Scott’s bill could be the first step towards a clearer and fairer framework. However, its opponents, including some Democrats and regulators, fear that this initiative opens the door to risky banking practices.

The opposition was heard on March 5 when the Senate met to discuss the bill. An exchange relayed on X by Ryan Grim shows the polarization of the debate:

Republicans are about to legalize debanking for ideological reasons. Where are Marc Andreessen, Zuckerberg, Elon Musk, and the others?

In light of these tensions, the crypto community hopes that a more precise regulatory framework will emerge. The crypto summit of Donald Trump, set for March 7, could also provide answers. The president, who recently criticized Bank of America and JPMorgan Chase for closing bank accounts, could unveil his ambitions regarding digital finance. Should we expect a revolution or mere campaign promises?