Wyoming senator backs Fed proposal to combat crypto debanking with restricted "skinny" accounts

Wyoming Senator Cynthia Lummis has applauded a Federal Reserve proposal from Governor Christopher Waller that would give crypto and fintech startups access to restricted “skinny” master accounts, saying the move could blunt what she and others describe as an industry-wide pattern of debanking. According to CoinCentral, the proposal, first floated by Waller at the Payments Innovation Conference in October, would allow non-bank payment firms limited access to the Fed’s payment rails while stopping short of full master-account privileges for commercial banks.

Lummis framed the plan as a direct response to what has been labelled “Operation Chokepoint 2.0,” a contested description for a set of practices she and industry advocates say have seen legitimate digital-asset companies pushed out of traditional banking relationships. CoinCentral and ZeroHedge reported that Lummis described the proposal as a means to end these debanking behaviours and to foster faster, cheaper and more secure payments infrastructure for innovators.

Industry testimony and recent incidents underscore the political stakes. At a House Financial Services Subcommittee on Oversight hearing, witnesses including Coinbase’s legal chief, Paul Grewal, testified about alleged systemic pressures that discourage banks from servicing crypto firms, pointing to supervisory tools such as FDIC “pause letters” as indirect deterrents, according to Axios. High-profile account actions also feed the narrative: CoinCentral recounts complaints by crypto executives, and public reporting has noted episodes in which large banks have frozen or restricted accounts for firms including Strike and various stablecoin startups, sometimes citing compliance concerns.

That pattern of restrictive behaviour has prompted mixed responses across the market. Venture capital firm Andreessen Horowitz warned of an emergent “Chokepoint 3.0,” in which banks exert influence not only by denying accounts but by imposing onerous fees or technical barriers to move money and access account data, a strategy a16z says could raise costs and reduce competition. According to CoinDesk reporting, that evolution represents a fresh challenge for firms that rely on seamless connectivity with traditional finance.

Some companies, however, have sought to resist or mitigate those pressures through different means. CoinDesk also reported that ConsenSys founder Joe Lubin said the Ethereum developer was twice targeted by attempts to exclude it from the financial system, but that its bank had pushed back against those pressures. Such accounts illustrate both the vulnerability of crypto firms to de-risking and the limited scope of protections currently available.

Waller’s “skinny” account concept is pitched as a partial workaround: by permitting crypto and fintech firms to plug directly into central-bank-operated payment infrastructure under constrained permissions, the Fed could reduce these firms’ dependence on commercial banks, and, proponents say, the leverage banks can exert. The plan would, according to CoinCentral, limit the range of services available to account holders while preserving core access to payments settlement.

Yet significant questions remain. Legal and regulatory actors continue to disagree over whether the pattern of account denials reflects unlawful discrimination or legitimate risk-based compliance decisions. The 2018 executive order signed by President Donald Trump that barred banks from denying services without lawful justification has not resolved the dispute in practice, CoinCentral notes, and policymakers face trade-offs between opening access and managing anti-money-laundering and sanctions risks. Regulators and banks have cited such compliance concerns in explaining account actions; industry witnesses and some lawmakers characterise those same actions as overly cautious or coercive.

If implemented, Waller’s proposal would mark a notable shift in how central-bank infrastructure could be used to address market frictions. Supporters such as Lummis argue it would restore competitive balance and enable innovation. Skeptics caution that a central-bank pathway will not eliminate commercial banks’ operational controls or wider regulatory friction, and that new forms of chokepoint behaviour, such as fee-based data throttling flagged by a16z, may simply migrate to other channels.

The Fed proposal remains at an early stage. Its design will determine whether “skinny” accounts offer a practical remedy to the banking difficulties described by crypto firms and witnesses, or whether further policy and supervisory changes will be required to reconcile financial stability, compliance and the industry’s access to core payment services.