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“Quitely” banning cryptocurrencies would be more extreme than regulating

Crypto regulations have been one among several crucial issues becoming, acting as a reason for a tussle between financial regulators and crypto proponents. The common belief of regulators that crypto threatens the traditional financial system persuades them to get rid of it. Discussion of banning the burgeoning asset class also remained nothing new as China-like countries have already done it, and many have expressed akin wishes several times. Now following the series of several instances taking place after one another makes the United States subject to doubt if the country is looking to ban cryptocurrencies right away.

Increasing Scrutiny Gives the Indication

According to Forbes, there are acquisitions of the Biden administration making efforts to ban Bitcoin (BTC), Ethereum (ETH) and other cryptocurrencies. The quiet ban is alleged, citing an operation dubbed “Operation Choke Point 2.0.” The initiative was from 2013 that called for making banking services free from unwanted industries.

Castle Islands Ventures partner and crypto venture capitalist Nic Carter noted in a recently published post that the government is trying to impose a “widespread crackdown against the crypto industry” in the wake of securing the banking sector.

She stated, “some in the crypto space believe that the recent attempts to ringfence the crypto industry and cut off its connectivity to the banking system are reminiscent of this little-known Obama-era program.”

Citing an anonymous source, the regulators are taking on some actions that are “aimed to kill crypto” while calling out that the US Federal Reserve and the Office of the Comptroller of the Currency (OCC) are carrying out large-scale crypto debanking operations.

Regulators Debanking Crypto Entities

As reported, the US central bank rejected an application of a crypto bank to join its ranks. The institution cited its absence of clarity over the approval of the applications of Protego and Paxos, like crypto firms for national trust bank charters, by the Office of the Comptroller of the Currency.

Carter argued that the administration’s efforts are not hidden, given “the memos, regulatory guidance, and blog posts” expressed them clearly. But the actual concern here is the span of the plan that includes even the financial regulators, which brings nervousness within the crypto community. It blows air to the heating issue that crypto-related business would go “unbanked” entirely; stablecoins might become helpless after the entry and exit out of crypto would be unmanageable and completely disconnect the crypto exchanges from the banking system.

“Rumours” Mongering Within Crypto Space

Coinbase CEO Brian Armstrong also expressed concerns over the ‘“rumors” of the SEC sanctioning the use of crypto staking for retail investors.

TheCoinRepublic reported Armstrong noting in a Twitter thread that if the financial regulator would go to do so, “it would be a terrible path for the US.” The development of financial services and Web3 technology in the US is a matter of national security. It is important to ensure the promotion and growth of new technologies and innovation should not be “stifled by the lack of clear rules.”

Source: https://www.thecoinrepublic.com/2023/02/10/is-the-us-likely-to-ban-bitcoin-and-ethereum-like-cryptocurrencies/