Rep. French Hill has made it clear that he intends to ramp up scrutiny of alleged efforts by regulators to cut off cryptocurrency businesses from banking services. This move comes in response to concerns raised by industry leaders and recent statements made by a16z co-founder Marc Andreessen.
During a hearing on financial technology on Dec. 3, Hill, who is a candidate to lead the House Financial Services Committee next year, expressed his worries about the situation. He emphasized the importance of legal businesses in the country having access to banking and financial services, and stated that the committee will thoroughly investigate these issues in the next Congress.
The discussion surrounding the alleged pressure on banks to terminate accounts associated with crypto and other industries has brought back concerns about what some are calling “Operation Choke Point 2.0.” This term refers to suspected efforts to limit banking access for certain sectors, similar to the original Operation Choke Point initiated by the Justice Department in 2013.
Executives from Stellar Development Foundation and Anchorage Digital testified during the hearing about how their companies have been affected by these issues. Stellar CEO Denelle Dixon mentioned the challenges in maintaining banking relationships, noting that they had to reach out to ten different banks with no reasons provided for the rejections.
The upcoming change in leadership of the House Financial Services Committee adds another layer of complexity to the situation. With current Chair Patrick McHenry retiring, Hill and other pro-crypto Republicans are vying for the position. President Donald Trump’s promise to end regulatory efforts resembling Operation Choke Point could signal a shift in how Congress approaches cryptocurrency and financial access.
The Federal Deposit Insurance Corporation (FDIC) has stated that banking institutions are not prohibited from serving specific industries, but questions remain about the uniform enforcement of such policies. The debate over stablecoin regulation was also addressed during the hearing, with lawmakers discussing the level of oversight that should be given to state regulators. Hill remains optimistic about advancing crypto-related legislation despite time constraints, believing that a consensus can be reached.
Rep. Maxine Waters, who has collaborated with McHenry on a bipartisan stablecoin framework, expressed hope for meaningful progress before the new Congress begins. However, the crowded legislative calendar poses challenges to achieving this goal.
In conclusion, the scrutiny of alleged efforts to cut off crypto businesses from banking services is gaining momentum, with key figures in Congress and the industry working towards finding solutions to ensure fair access to financial services for all legal businesses.