New GOP bill aims to end debanking of crypto companies, ‘risky’ industries

South Carolina Senator Tim Scott, the leader of the US Senate Banking Committee, plans to introduce a bill on March 6 to end regulatory oversight of customer reputational risks toward banks, paving the way for an end to a discriminatory practice known as “debanking,” according to a report from The Wall Street Journal.

Debanking is a practice where banks may choose not to do business with clients that pose “reputational risks.” The Federal Reserve defines reputational risk as “the potential that negative publicity regarding an institution’s business practices, whether true or not, will cause a decline in the customer base, costly litigation, or revenue reductions.”

At least 11 Republican lawmakers are reportedly co-sponsoring Scott’s bill, while various banking industry groups are planning to endorse it, The Wall Street Journal said. These groups include the Bank Policy Institute, which labels itself as a nonpartisan group that represents the nation’s leading banks. JPMorgan Chase, the largest bank in the United States, said it is also in support of the bill.

Debanking has allegedly affected companies in several industries over the past two decades, including firearms, federal prison contractors, cannabis and the cryptocurrency industry. The practice has become a hot topic in the past four years, with cryptocurrency advocates making claims that a campaign was orchestrated to debank legitimate crypto companies in the United States.

Related: Custodia Bank CEO calls out Washington’s debanking ’skullduggery’

Senators Kevin Cramer and John Kennedy announced in February 2025 the introduction of a similar bill aimed to protect fair access to financial services and ensure banks act in “a safe and sound manner.” In a show of bipartisanship, the progressive American Civil Liberties Union has advocated against the practice of debanking. 

Debanking of crypto and “Operation Chokepoint 2.0”

In November 2024, Marc Andreessen, co-founder of Andreessen Horowitz, claimed that more than 30 technology and crypto founders had been denied access to banking services in the US, lighting a fire under the debate surrounding the alleged “Operation Chokepoint 2.0” orchestrated by the Biden administration.

In February 2025, the newly in-power GOP held congressional hearings about the issue, revealing tensions among party lines but a surprising agreement that debanking should be done away with. Even among outside sources that Cointelegraph contacted, it is unsure whether “Operation Chokepoint 2.0” was a real issue or just “rhetorical red meat for the GOP base.”

Related: ‘AI’ takes Collins dictionary word of the year, ‘debanking’ makes shortlist

While Senator Elizabeth Warren did not specifically mention digital asset firms in a congressional hearing on debanking on Feb. 5, she did say that “if banks are adopting policies that routinely debank people based on their beliefs or other illegitimate reasons — that’s wrong, it needs to be stopped.”

Speaking at ETHDenver on Feb. 28, Custodia Bank’s Caitlin Long said that nothing has changed in US crypto banking under the Trump administration. “[The] perception is that there has been a loosening; none of the federal banking agencies have actually overturned any of the anti-crypto guidance.”

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