GOP Bill Targets Crypto Debanking, High-Risk Industry Protection

New GOP Bill: A Fight Against ‘Debanking’

The Republican senators in the U.S. have come up with a new bill that wants to stop something called ‘debanking’. This is when banks don’t want to work with certain companies, like those in the world of cryptocurrency, because they think these businesses might be risky. The bill’s main goal is to make sure that businesses can get banking services even if they’re in industries that some people might think are risky.

What is ‘Debanking’?

‘Debanking’ is when banks decide not to work with certain businesses because they think these businesses might have problems in the future. This has been a big issue for companies that deal with cryptocurrency. They’ve had a hard time finding banks that will work with them because some people think cryptocurrency isn’t safe or stable enough[3][5]. This issue has even caught the attention of political figures like former President Trump, who has said that banks should not close the accounts of certain people[4].

The New Bill: The FIRM Act

The new bill, called the Financial Integrity and Regulation Management Act (FIRM Act), wants to stop regulators from using something called ‘reputational risk’ as a reason to tell banks not to work with certain businesses[3][5]. This way, the bill hopes to make the financial world more fair and open, especially for businesses that deal with digital money[5].

Senator Tim Scott, who is leading this bill, thinks that regulators have been using the idea of ‘reputational risk’ to go after businesses that are actually following the law. He wants to stop this from happening[5].

What People Think About the Bill

Some people who support cryptocurrency and some Republicans like this bill. But it also has some people against it, like consumer advocates and Democrats. They think that regulators should keep a close eye on digital money because there have been problems in the past, like fraud and security issues[3][5]. Senator Elizabeth Warren is one of these people. She thinks that digital money needs strong rules to protect the people who use it[3].

What Does the Future Hold?

The new bill is a big step in trying to fix the ‘debanking’ problem, which has been a big challenge for cryptocurrency companies and other businesses that some people think are risky. The bill wants to make it easier for these businesses to get banking services. But it also has to deal with people who think that these businesses need strong rules to keep them safe. In the end, it’s important to find a good balance between letting businesses grow and keeping the financial system safe.

—

Sources:
– ChainCatcher
– Business Insider
– Coindesk
– Followin