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Federal Reserve Chair Jerome Powell has acknowledged growing concerns over the debanking of crypto firms, calling for a "fresh look" at the issue.
What’s the Scoop?
- Powell Gets Pressed: During the Senate Banking Hearing that took place Tuesday, Senator Tim Scott asked Jerome Powell to work with him so that financial regulations don’t “impose more burden than is necessary.” Powell then responded by saying that he was committed to working on that topic with him.
- Need for Regulator Clarity: Powell claimed that the debanking of some of the crypto firms and people who work in the crypto space wasn’t intentional, but that regulatory action had unintended effects.
Bankless Take
Powell’s remarks highlight a fundamental issue: crypto firms continue to struggle with access to banking due to a lack of regulatory clarity. The absence of clear guidance has left financial institutions hesitant to act, leading to a mass debanking across the crypto industry. If regulators are serious about fostering responsible innovation, they need to establish explicit, workable policies that allow crypto companies to operate within the system rather than being pushed out of it.
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