New Law Wants to Stop Banks from Dropping Crypto Companies
Some senators in the U.S. have come up with a new plan to stop banks from dropping crypto companies and other businesses they think are “risky.” This is called “debanking,” and it happens when banks don’t want to work with certain businesses because they think there might be problems later on. This new law, called the Financial Integrity and Regulation Management (FIRM) Act, wants to make sure banks can’t use this as an excuse to stop working with these businesses.
What is Debanking?
Debanking is when banks don’t want to work with certain businesses because they think there might be problems in the future. This has been a big issue for crypto companies, which have had trouble finding banks to work with because some people think they’re not safe or stable[3][5]. Lots of people, including the former president, have talked about this problem[4].
A New Law to Help
The FIRM Act is a new law that some senators want to pass. It’s designed to stop regulators from telling banks they can’t work with certain businesses just because they think there might be problems later on[3][5]. This way, more businesses can find banks to work with, especially crypto companies[5].
Senator Tim Scott, who is leading this effort, says that regulators have been using this excuse to stop businesses from working with banks, even if they’re doing everything right[5]. He thinks this new law will help stop debanking and let crypto companies grow and innovate more[3][5].
What People Think About This Law
Some people who like crypto think this law is a good idea. But some other people, like some senators and consumer groups, don’t like it. They think crypto can be dangerous because of things like fraud and hacking[3][5]. Senator Elizabeth Warren, for example, thinks we need to watch crypto companies very closely to keep people safe[3].
What Does This Mean for the Future?
This new law is a big step towards stopping debanking, which has been a big problem for crypto companies. It wants to help these companies and other businesses that people think are “risky” find banks to work with. But some people think we need to be careful and watch these businesses closely to keep people safe. So, it’s important to find a good balance between letting these businesses grow and keeping people safe.
Sources: ChainCatcher, Business Insider, Coindesk, Followin