Federal Reserve Proposal May End Crypto Debanking, Says Senator Lummis

According to Cointelegraph, Wyoming Senator Cynthia Lummis, a pro-crypto United States lawmaker, has expressed support for a recent proposal by Federal Reserve Governor Christopher Waller. The proposal aims to provide crypto companies access to "skinny" master accounts, potentially ending debanking practices under Operation Chokepoint 2.0. Governor Waller introduced this idea at the Payments Innovation Conference in October, suggesting that crypto and fintech startups, including payment-only banks, could access accounts at the Federal Reserve similar to the "master accounts" used by banks, albeit with certain restrictions. Senator Lummis praised Waller's framework, stating that it could end Operation Chokepoint 2.0 and pave the way for genuine payments innovation. She emphasized the benefits of faster payments, reduced costs, and enhanced security as essential components for responsibly building the future of finance. Operation Chokepoint 2.0 has been described as a coordinated effort to deny banking services to crypto companies and their founders, with venture capitalist Marc Andreessen noting that more than 30 tech founders were affected by debanking under this operation. The proposal from Waller signifies a regulatory shift in the United States, where officials and lawmakers are increasingly recognizing cryptocurrencies and fintech startups as vital upgrades to the payments system and the future of finance. Despite U.S. President Donald Trump signing an executive order in August to prohibit banks from debanking Americans and businesses without lawful cause, crypto executives and Web3 companies have continued to report debanking issues. The order also directed U.S. banking regulators, including the Federal Deposit Insurance Corporation (FDIC), to identify and potentially penalize banks and financial institutions engaged in debanking. In November, Jack Mallers, CEO of Bitcoin payments company Strike, reported being debanked by JPMorgan without explanation. Mallers shared his experience in a separate post, stating that JPMorgan repeatedly refused to disclose the reasons for their actions. Additionally, JPMorgan Chase froze the bank accounts of stablecoin startup companies BlindPay and Kontigo in December, citing alleged exposure to sanctioned jurisdictions as the reason for their actions.