Rep. French Hill on Crypto Debanking

Rep. French Hill, poised to influence financial service priorities next year, expressed concerns about debanking in the crypto sector and intends to investigate further in 2024.

Venture capitalist Marc Andreessen, a co-founder of a16z, stated during a recent interview on Joe Rogan's podcast that the U.S. government has pressured banks to close accounts linked to crypto and other industries. Crypto executives, including Roman Storm of Tornado Cash and Caitlin Long of Custodia Bank, have shared their experiences of debanking.

Hill remarked, "No one has any patience on that on either side of the aisle here" during a House Financial Services Committee hearing on technology and finance. He emphasized the need for legal businesses in the U.S. to have access to banking services.

Hill announced, "This committee is going to take a strong position on that," assuring that the review of relevant documents would continue.

The phrase "Operation Choke Point 2.0" is being used in the crypto industry's discussions, linking it to the original Operation Choke Point, a DOJ initiative from 2013 aimed at restricting banking services for high-risk industries. Newly elected President Trump has committed to ending this initiative, suggesting a more favorable stance towards crypto.

During the hearing, Hill inquired if witnesses from Stellar and Anchorage Digital had experienced debanking, both confirming they had.

Dixon mentioned their experience with multiple banks without any given reason for debanking.

Hill may take the lead of the House Financial Services Committee next year, alongside other crypto-friendly Republicans like Andy Barr, Bill Huizenga, and Frank Lucas. Current Chair Patrick McHenry is retiring, marking the end of his term in this hearing.

The FDIC and OCC have stated that banks are not prohibited from providing services to any specific customer class. A similar assertion was made by the Federal Reserve in July 2024.

Stablecoin Regulation Discussions

Lawmakers also questioned how to regulate stablecoins during the hearing, discussing the role of state regulators in approving stablecoin issuances. Hill expressed hope that crypto legislation, including a stablecoin bill, would be considered before the end of 2024.

Rep. Maxine Waters praised McHenry's efforts in drafting stablecoin legislation, expressing optimism for a conclusion before year's end.

Update: Dec. 4, 7:40 p.m. UTC to include prior statements from U.S. agencies.