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A group of Republican lawmakers has called on the Federal Deposit Insurance Corporation (FDIC) to clarify regulations surrounding crypto-assets and prevent financial institutions from unfairly denying services to crypto-related firms.
In a letter addressed to the key federal regulator, acting chair of the financial services committee Travis Hill and representatives French Hill, Dan Meuser, Andy Barr and Bryan Steil shared their concerns that Biden administration regulators pressured banks to sever ties with digital asset firms, a practice often referred to as "debanking".
The letter follows a recent congressional hearing, “Operation Choke Point 2.0: The Biden Administration’s Efforts to Put Crypto in the Crosshairs”, in which lawmakers criticised regulatory efforts that they argued unfairly target the digital asset sector.
“We are concerned that if we do not make the necessary changes, future administrations will continue to operate under the Choke Point playbook using the supervisory process to debank disfavored industries,” the letter says.
The lawmakers proposed five key recommendations to bring transparency and consistency to the FDIC’s approach:
- Written guidance that would require all banking supervisory guidance to be published and documented, eliminating informal, verbal-only directives.
- Concrete rationale for account closures, which would mandate that banks provide customers with a clear explanation when closing accounts.
- Eliminate "reputational risk", which would remove subjective risk factors as a supervisory criteria to prevent subjective or politically motivated decisions.
- Balancing test for regulations, which would implement periodic reviews of regulatory guidance to assess its impact on lawful businesses and individuals.
- Uniform application, which would guarantee that all financial institutions follow the same supervisory standards, preventing preferential or punitive treatment.
While acknowledging that congressional action may still be needed to fully address regulatory gaps, the lawmakers urged the FDIC to act where possible and to clarify which reforms require legislative intervention.
“Please let us know which recommendations you believe require an act of Congress to help better inform our legislative efforts,” the letter says.
The crypto trend
The letter to the FDIC is just the latest intervention to be made regarding crypto since President Trump was sworn into office.
The former reality television star has aligned himself with the crypto industry, which had previously fallen foul of regulatory figures in the Biden administration such as US Securities and Exchange Commission (SEC) chair Gary Gensler.
For example, on January 23, in his earliest days back in the Oval Office, the President issued an executive order that had the goal of securing US leadership in digital financial technology while enhancing regulatory clarity and protecting economic freedom.
The order emphasises support for blockchain innovation by safeguarding individuals' rights to use crypto-assets, mine cryptocurrencies and maintain self-custody of their holdings.
In addition, the order seeks to guarantee fair access to banking services for lawful businesses and individuals, preventing discriminatory practices against crypto firms.
