Rep. French Hill, who could have a pivotal role next year in setting financial service priorities, said he was concerned about debanking in the crypto industry and plans to scrutinize the issue in the new year.
Venture capitalist and a16z co-founder Marc Andreessen said that the U.S. government had pressured banks to close certain accounts connected to crypto and other industries during a recent interview on Joe Rogan's podcast. Since then, several crypto executives have aired their experiences, including Tornado Cash co-founder Roman Storm and Custodia Bank CEO Caitlin Long.
"No one has any patience on that on either side of the aisle here," Hill said on Wednesday during a House Financial Services Committee hearing focused on technology and finance. "Legal businesses in the United States, in this great country should have the freedom to bank and have financial services. We've seen this over and over again."
"This committee is going to take a strong position on that," Hill added. "We have the documents, we're reviewing. We're going to continue that review through the end of this Congress and into the next Congress."
Some in the crypto industry refer to the phrase "Operation Choke Point 2.0," tied to Operation Choke Point 1.0 — a U.S. Department of Justice Initiative from 2013 that looked to limit banking services for industries considered high-risk for fraud and money laundering, including payday lenders and firearm dealers. Newly elected President Donald Trump has vowed to end "Operation Choke Point 2.0," signaling a friendly approach toward crypto.
Hill asked witnesses Stellar Development Foundation CEO Denelle Dixon and Anchorage Digital CEO Nathan McCauley during Wednesday's hearing whether they had been debanked. Both said yes.
"It was a process where we've now had to go to 10 different banks," Dixon said, adding that a reason was not given.
Hill could lead the House Financial Services Committee next year. Other names being thrown to lead the committee include Republicans Andy Barr of Kentucky, Bill Huizenga of Michigan and Frank Lucas of Oklahoma — all are friendly toward crypto. Current House Financial Services Committee Chair Patrick McHenry, R-N.C., is retiring, with Wednesday's hearing being the last.
The Federal Reserve, Federal Deposit Insurance Corporation and the Office of the Comptroller of the Currency did not immediately respond to a request for comment.
Lawmakers on Wednesday also asked several questions about how stablecoins should be regulated, including what role states should have.
Work has been underway for years by both McHenry and top Democrat of the committee, Rep. Maxine Waters of California, on a bill to regulate stablecoins. In the past, they hit a snag over a provision that allows state regulators to approve stablecoin issuances without Federal Reserve input.
Hill said in late October that he was optimistic that crypto legislation, including a bill on stablecoins, will be considered in the lame duck and before the end of 2024. The lame duck is the period after the November election and before a new Congress steps in in January. However, time constraints and certain priorities, including funding the government, could pose significant challenges.
Waters pointed to McHenry's work over the last several years to draft stablecoin legislation during the hearing on Wednesday.
"I have long appreciated Mr. McHenry's commitment to good faith negotiation, and I'm hopeful that he will pull another rabbit out of the hat to pass a deal into law before the year ends," Waters said.
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