- Jerome Powell is okay with banks serving crypto customers under proper guidance.
- Industry insiders viewed his statement as a ‘shift’ from the Biden administration.
Fed’s chair Jerome Powell has signaled a likely U-turn from the infamous crypto de-banking, which his agency has been implicated for abating during the Biden administration.
Dubbed ‘Operation ChokePoint 2.0 (OCP 2.0)’ the reported wide-scale banking access restriction against crypto firms caught the attention of the new Trump administration and formed a formal inquiry.
However, during the Wednesday presser, Powell clarified that banks can now serve crypto customers under proper risk protection. He stated,
“Banks are perfectly able to serve crypto customers as long as they understand and can manage the risks […] we’re not against innovation.”
He continued,
“We certainly don’t want to take actions that would cause banks to terminate customers who are perfectly legal just because of excess risk aversion maybe related to regulation and supervision.”
A new dawn for crypto users?
Nic Carter, co-founder at Castle Island Ventures and one of the prominent people who covered the OCP 2.0, has always pinned the Fed as the force behind the massive de-banking in the sector.
Note, however, that the recent Powell statement has made him believe that the restriction was over. He said,
“Immense tonal shift. OCP2.0 is over. This is particularly notable because my understanding is the Fed specifically was the nexus of OCP2.0.”
For perspective, in a recent ‘Joe Reagan Experience’ interview, a16z co-founder Marc Andreessen claimed that 30 tech founders were de-banked over the past four years.
James Comer, the Chairman of the House Committee on Oversight and Government Reform, is investigating the matter. As such, the shift relieves most of the previously sidelined tech startup ecosystem, including crypto.
Coinbase’s Chief Legal Officer, Paul Grewal, also called Powell’s statement a ‘change’ from the last administration. He said,
“What I hear Jay Powell saying is: banks are now free to manage any risks from crypto, just like they manage any risks from any other industry. What a change from the last four years.”
That’s not all, though. The infamous SEC accounting guidance SAB 121, which restricted the inclusion of crypto assets in firms’ financial statements, was also recently rescinded.
Collectively, these positive updates could drive more crypto adoption in the US.
