Fed Vice Chair Refutes Crypto Industry Debanking Allegations in the US

The Federal Reserve maintains a balanced approach regarding crypto companies’ access to banking services, according to Vice Chair Michael Barr, as reported by The Block.

Barr stated that the central bank does not hinder this activity— the Fed provides institutions with clear guidelines and restrictions but does not obstruct the establishment and maintenance of relationships with crypto firms. This comment from the Fed official responsible for overseeing the financial institutions sector addresses concerns about the so-called debanking of the industry.

“We consistently say that we strive to adhere to a clear line of conduct, […] so that organizations wishing to engage in this activity can do so appropriately. We do not tell them they must do it, nor do we tell them they must not,” Barr noted.

Barr’s comments followed statements from Fed Chair Jerome Powell, who called for a “fresh look” at debanking.

Barr will step down as Vice Chair at the end of February but will remain a member of the Fed’s Board of Governors.

In June 2024, Coinbase filed a lawsuit against the SEC and the FDIC over their attempts to “cut off” the crypto industry from the banking sector.

In January, lawyers from History Associates claimed that the latter regulator concealed requested documents.

Earlier, Wyoming Senator Cynthia Lummis threatened the FDIC with criminal charges if the agency indeed destroyed data related to crypto oversight.

Back in February, U.S. President Donald Trump nominated Jonathan Gould to head the OCC at the U.S. Treasury.