Federal Reserve officials said on Wednesday that U.S. businesses shouldn’t be able to serve customers or offer innovative new services.

Fed Chairman Jerome Powell stated in a press conference on Wednesday that the U.S. central banks is” no against innovation” and that “banks are completely able to serve crypto customers, as long as they understand and can handle the hazards.”

” A good number of our businesses that we control and manage do that”, Powell continued. The threshold for businesses engaging in bitcoin activities has increased a little.

Powell made the remarks a few days after the House of Representatives began conducting an official investigation into a story known as” Operation Choke Point 2.0.” His remarks were made in response to a reporter’s question about whether debate in an unregulated asset class had hurt American families.

The name for the alleged plot, which borrows its title from an Obama-era action, was popularized by Nic Carter, a companion at Castle Island Ventures. In a blog on X, Carter described Powell’s remarks as an “immense switch”, largely bringing an end to said story.

Coinbase’s Chief Legal Officer Paul Grewal also told Decrypt&nbsp, in an email that Powell’s remarks were refreshing.

” What a shift from the last four times”, he said. What Jay Powell is saying is,” Banks are then free to handle any dangers from blockchain, just like they manage any risks from any other business.”

The Republican-led investigation into “debanking” under the Biden administration aims to determine whether individuals and businesses were prevented from banking because of their engagement in particular companies. Powell noted that while some crypto customers may have a complex risk, they shouldn’t necessarily get rejected for it.

” We definitely don’t want to take actions that may cause lenders to cancel users who are completely legal, just because of excessive risk aversion]that’s ] even related to regulation, “he said.

Powell cautioned businesses who are directly engaging with bitcoin, possibly as a way to provide customers with new services, given that the asset class is still relatively new.

” If you’re making a choice to conduct]crypto] action inside a lender, which is inside the national safety nets with loan insurance, then you want to be convinced that it’s safe and sound, “he said.

Gary Gensler, a former SEC chair, testified before Congress in September that he had never heard the term” Choke Point 2.0.” He denied knowing about it. The SEC rescinded Staff Accounting Bulletin ( SAB) No. 94 shortly after Gensler left the agency last week. 121.

In the end, the contentious crypto accounting rule, which was introduced in March 2022, made banks promise to treat digital assets as liabilities on their balance sheets.

At least 23 instances dating back to March 2022 were documented in documents obtained by crypto exchange Coinbase under the Freedom of Information Act, which revealed the Federal Deposit Insurance Corporation or FDIC had also stopped banks from providing crypto services. &nbsp,

A” Bank Digital Deposit” program that the FDIC took issue with because it ran on a public blockchain was detailed in one letter. After trying to establish a service that allows customers to buy and sell Bitcoin, another letter directed a bank to “put a stop to all crypto asset-related activity.”

The possibility of a government conspiracy has already begun to gain widespread attention, despite the House investigation still being in its early stages. &nbsp,

In November, Marc Andreessen, co-founder of venture capital firm Andreessen Horowitz, claimed on the popular” The Joe Rogan Experience “podcast to personally know 30 tech founders who were debanked.

Daily Debrief Newsletter

Start every day with the top news stories right now, plus original features, a podcast, videos and more.

Share This Story, Choose Your Platform!