An anonymous reader quotes a report from Ars Technica: A Donald Trump-backed push has failed to wedge a federal measure that would block states from passing AI laws for a decade into the National Defense Authorization Act (NDAA). House Majority Leader Steve Scalise (R-La.) told reporters Tuesday that a sect of Republicans is now "looking at other places" to potentially pass the measure. Other Republicans opposed including the AI preemption in the defense bill, The Hill reported, joining critics who see value in allowing states to quickly regulate AI risks as they arise.
For months, Trump has pressured the Republican-led Congress to block state AI laws that the president claims could bog down innovation as AI firms waste time and resources complying with a patchwork of state laws. But Republicans have continually failed to unite behind Trump's command, first voting against including a similar measure in the "Big Beautiful" budget bill and then this week failing to negotiate a solution to pass the NDAA measure. [...]
"We MUST have one Federal Standard instead of a patchwork of 50 State Regulatory Regimes," Trump wrote on Truth Social last month. "If we don't, then China will easily catch us in the AI race. Put it in the NDAA, or pass a separate Bill, and nobody will ever be able to compete with America." If Congress bombs the assignment to find another way to pass the measure, Trump will likely release an executive order to enforce the policy. Republicans in Congress had dissuaded Trump from releasing a draft of that order, requesting time to find legislation where they believed an AI moratorium could pass. "The controversial proposal had faced backlash from a nationwide, bipartisan coalition of state lawmakers, parents, faith leaders, unions, whistleblowers, and other public advocates," the NDAA, a bipartisan group that lobbies for AI safety laws, said in a press release.
This "widespread and powerful" movement "clapped back" at Republicans' latest "rushed attempt to sneak preemption through Congress," Brad Carson, ARI's president, said, because "Americans want safeguards that protect kids, workers, and families, not a rules-free zone for Big Tech."
Republicans on the House Financial Services Committee have released a 50-page report detailing what they describe as a systematic debanking effort by Biden-era regulators, dubbed “Operation Chokepoint 2.0.”
While many of the findings — such as the Fed, FDIC, and OCC pressuring banks away from crypto through informal guidance, and the SEC’s “enforce first, make rules never” approach — were previously known, the report now places them squarely in the Congressional record.
The report identifies at least 30 entities that were effectively “debanked” through informal regulatory guidance and supervisory pressure. These businesses, the Committee claims, were forced out of the U.S. banking system without formal enforcement actions.
Government coercion, biased enforcement, and private pressure — all while denying
According to the document, the Federal Reserve, the Federal Deposit Insurance Corporation (FDIC), and the Office of the Comptroller of the Currency (OCC) employed a range of tactics to influence bank behavior.
These included “non-objection” letters, “pause” letters, and other forms of informal guidance designed to make banks hesitant to engage with crypto companies.
Meanwhile, the Securities and Exchange Commission (SEC) allegedly adopted a policy of “enforce first, make rules never,” using selective enforcement rather than clear regulatory frameworks to restrict digital-asset activity.
The report highlights SAB 121, an SEC guidance that effectively blocked banks from offering custody services for crypto assets.
The report paints a picture of regulators publicly denying any bias against digital assets, while privately pressuring banks to sever ties with crypto firms. The report reads that while regulators consistently denied discouraging digital-asset activity, the evidence collected by the Committee shows a pattern of private pressure and informal coercion.
Committee Republicans argue these actions represent a revival of Operation Choke Point, a controversial program from the early 2010s that used regulatory and reputational pressure to discourage banks from serving certain high-risk industries.
The report asserts that the tactics used against crypto firms echo the same methods: informal guidance, opaque supervisory expectations, and reputational risk warnings.
“The lack of clear rules combined with aggressive enforcement has created a chilling effect on the digital-asset sector,” said a Committee spokesperson. “Legitimate American businesses were forced to move abroad or shut down, not because of wrongdoing, but because of regulatory overreach.”
Crypto firms struggled to keep bank accounts
The report includes anecdotal accounts of firms that struggled to maintain bank accounts despite following all applicable laws. One executive described repeated requests for documentation, sudden account closures, and vague warnings from compliance officers citing regulatory “uncertainty.”
Another recounted being effectively cut off from the U.S. banking system after submitting a routine regulatory filing.
Republicans on the Committee argue that this environment has stifled innovation and driven financial activity offshore. They call on Congress and the Biden administration to reverse these policies, provide explicit guidance, and ensure that legitimate crypto firms can access banking services without fear of arbitrary pressure.
The Committee’s full report is available in full on the House Financial Services Committee website.
Congressional Republicans angered local government leaders with a plan for what local groups call an “unprecedented federal intrusion” into how municipalities issue permits for construction of broadband networks. The Republican plan drew rave reviews from cable lobby groups, however.
A House subcommittee moved ahead with the plan today despite the opposition from local leaders and criticism from congressional Democrats. Under the bills, some kinds of local telecom projects would be approved automatically if a city or town doesn’t rule within a deadline set by Congress.
“These bills represent an unprecedented federal intrusion into established local decision-making processes, favoring large broadband, telecommunications, wireless, and cable companies at the expense of residents and taxpayers,” four groups representing local leaders wrote in a letter to US lawmakers. “These bills strip local governments of the ability to effectively manage the infrastructure built on local streets and in neighborhoods, while imposing no reciprocal obligations on providers.”
Even as Washington remains hobbled by a partial government shutdown, momentum for U.S. crypto market structure legislation is quietly reaching new heights.
Coinbase CEO Brian Armstrong says the industry is “90%” of the way there, describing unprecedented bipartisan cooperation among senators working to finalize the long-awaited regulatory framework for digital assets.
Armstrong, who spent this week meeting with both Senate Democrats and Republicans, said the last few sticking points of the CLARITY Act — including rules for decentralized finance (DeFi) and stablecoin rewards — are close to being resolved.
“Both sides are working hard to figure out the final 10%, and we’re getting close,” he said in a social media post. “We’re bullish on getting a bill passed by year-end, and hopeful it’s out of Committee by Thanksgiving.”
The Coinbase chief’s optimism comes amid a surge of engagement between lawmakers and crypto executives, marking one of the most serious bipartisan pushes to bring clarity to digital asset regulation since Congress first began debating the issue years ago.
JUST IN: Coinbase CEO Brian Armstrong says, “There is strong bipartisan support to get this market structure legislation done.” pic.twitter.com/Z8PI1OXDJc
The legislation at the center of these discussions — the Digital Asset Market Clarity Act (CLARITY Act) — passed the House of Representatives in July with a strong bipartisan majority of 294–137.
The bill now sits before the Senate Banking Committee, chaired by Sen. Tim Scott (R-SC), with hopes it could advance to the Senate floor before the end of the year.
In a CNBC interview on Wednesday, Armstrong described “very productive” meetings with senators from both parties, calling the level of collaboration a positive sign for the U.S. crypto industry.
According to multiple people familiar with the meetings, senior lawmakers including Senate Majority Leader Chuck Schumer (D-NY), Sen. Kirsten Gillibrand (D-NY), and Sen. Cynthia Lummis (R-WY) attended or participated in discussions with Armstrong and other crypto leaders such as Kraken co-CEO David Ripley, Uniswap Labs founder Hayden Adams, and Chainlink Labs’ Sergey Nazarov.
The CLARITY Act seeks to end years of regulatory ambiguity by clearly distinguishing which digital assets qualify as securities under the Securities and Exchange Commission (SEC) and which fall under the Commodity Futures Trading Commission (CFTC).
Under the bill’s framework, sufficiently decentralized networks would fall under CFTC oversight, while tokens with more centralized control or that function as investment contracts would remain under SEC jurisdiction.
The legislation also introduces clearer rules for decentralized finance, secondary trading markets, and custody services — areas where the lack of uniform federal guidance has long frustrated both innovators and investors.
DeFi and stablecoin legislation
Still, the final 10% of negotiations may prove the toughest. One of the key unresolved questions is how to regulate decentralized finance platforms.
Armstrong has urged lawmakers to focus oversight on decentralized intermediaries — such as interfaces or aggregators — rather than attempting to regulate open-source protocols themselves.
Another area of tension involves stablecoin rewards, which Armstrong says the banking lobby is working to eliminate. Coinbase and other industry advocates argue that consumers should be able to earn yield on regulated stablecoin holdings, similar to how traditional savings accounts pay interest.
These debates underscore the competing visions within Congress: Democrats remain focused on preventing illicit finance and ensuring consumer protection, while Republicans emphasize innovation and competitiveness.
Despite the bipartisan goodwill, the timing remains precarious. The ongoing government shutdown has slowed committee work and pushed back the formal markup of the bill. Some lawmakers, including Sen. John Kennedy (R-LA), have expressed skepticism that the committee is ready to move forward, citing unanswered questions about regulatory authority and industry influence.
Still, supporters say the momentum is undeniable. Sen. Lummis, who has long championed digital asset legislation, recently told attendees at the SALT Wyoming Blockchain Symposium that she expects the market structure bill to reach the president’s desk “before the end of the year — hopefully before Thanksgiving.”
One month ago, Harshvardhan (“Hash”), an alumni of the MIT Bitcoin Club and an organizer for the MIT Freedom Tech Expo, told me in an interview about how a friend of his who is a social worker in Nepal and who was on the ground during the recent protests in the countrydoesn’t like Bitcoin.
“There’s a lot of people with left-leaning ideology who still think bitcoin is a capitalistic tool, and they’re not very comfortable with it yet,” explained Hash.
I’ve been thinking a lot about this point he made since we spoke.
As someone who was formerly more politically Liberal, I still have a lot of friends and acquaintances who seemingly shudder at the mere thought of my writing about Bitcoin for a living. I get the feeling that they think I’ve become some right-wing fanatic who only cares about money.
I can see why they might think that (despite it not being true). In the U.S., Bitcoin has very much become synonymous with the Trump administration and most of what the average person sees about it in the mainstream media is reporting on its price going up or down.
Put another way, if you’re not intentionally searching for stories about how Bitcoin facilitates financial inclusion, the freedom to transact, and protection from inflation/currency debasement, then you aren’t likely to find them, which means that the average person hardly — if ever — gets exposure to the human rights side of the Bitcoin story.
And so if you’re looking for some examples or thoughts to share with friends of yours who may be on the political left and don’t like Bitcoin as a result, I’ve included a few below:
Financial Inclusion
One of the most powerful stories of Bitcoin enabling financial inclusion is the story playing out in the informal settlement (i.e., slum) of Kenya’s Kibera right now.
Kibera is the largest informal settlement in Africa, and thanks to the hands-on work that Afribit Kibera is doing to educate members of the Kibera community about how to use Bitcoin, more and more of Kenya’s poorest and most financially vulnerable have been brought into the digital economy and are saving for the first time in their lives.
The story of the work Afribit Kibera is doing was highlighted in a recent segment by the BBC:
One of the points not mentioned in this segment, though, is that many of the residents of Kibera are refugees from other African nations and are currently ineligible for a national ID.
Without a national ID, these residents cannot use M-Pesa, a digital payments system that’s ubiquitous in Kenya.
However, with a Bitcoin Lightning wallet and Tando, a homegrown Kenyan app that enables payment in bitcoin and settlement in Kenyan shillings, these members of the community can take part in the digital economy, as neither require Know Your Customer (KYC) checks. (Yes, I know, some custodial Lightning wallets require varying degrees of KYC, but noncustodial Lightning wallets don’t.)
Freedom to Transact
Most of us in the West take for granted our freedom to transact over digital payment rails like PayPal, CashApp, or Revolut, which means we haven’t had much reason to think about how devastating it would be if our accounts via those services, or our bank accounts, were frozen or shut down.
However, activists and dissidents around the world, especially those living under authoritarian regimes, see their accounts closed often when they speak out against the powers that be. Debanking people or organizations that challenge the power of authoritarian rulers has become one of the first moves in the dictator’s playbook.
With that said, we also saw a wave of debanking in the United States under the Biden administration. During Operation Choke Point 2.0, the Biden administration debanked a number of Bitcoin and crypto companies, seemingly for no reason other than that they were politically out of favor.
This proves that, while the banking system and fintech companies are technically still private institutions, it only takes a certain amount of pressure from the powers that be — even democratically-elected officials — to stop people and companies from being able to transact.
In her book Broken Money, Lyn Alden highlights the importance of bitcoin as it pertains to this issue.
She states that “self-custodial financial services force governments to actually charge people with a crime before they can use pressure to freeze their accounts.”
Alden added that Bitcoin is bigger than political ideology in this regard.
“[Bitcoin] is not a ‘right or left’ issue, because one merely needs to imagine their least-favorite politician winning the next election, or two or three elections from now,” she wrote.
Lyn Alden’s Broken Money: A very important read no matter which side of the political divide you’re on.
Freedom from Inflation
Many who are unfamiliar with Bitcoin, don’t understand the significance of its capped supply (There will only ever be 21 million bitcoin).
A perfectly finite supply of money contrasts starkly with fiat currencies, which have no supply cap. Fiat currencies can be printed to no end, which devalues the time and labor of the users of these currencies.
Those of us living in the United States have felt the pain of this currency debasement, as inflation levels have been notably high here. However, it’s important to note that the U.S. dollar is essentially the prettiest pig in the pen when it comes to fiat currencies.
Most other currencies are being debased at a more alarming rate, with the most severe instances of this being what has happened in countries such as Venezuela, Lebanon, Argentina, and Turkey.
This is why when Sabina Waithira, one of the co-founders of the aforementioned Tando, teaches university students in Kenya about bitcoin, she highlights that it offers freedom from inflation.
Last week at the University of Nairobi, Chiromo campus, we spoke with computer science students about how Bitcoin offers true freedom. Freedom from inflation, freedom form high fees, and an open financial system for all. At Tando, we’ve made it possible to hold that freedom in… pic.twitter.com/B09YpK1GWT
Since Bitcoin is an open protocol and isn’t governed by one person or institution, it isn’t inherently political.
Sure, the Trump administration has taken a pro-Bitcoin stance, which may be offputting to those on the political left, but that doesn’t mean Bitcoin doesn’t facilitate notions like financial inclusion, an issue that Liberal politicians tend to support.
And if you find yourself politically homeless but still a proponent for human rights as they’re enabled by Bitcoin, be sure to learn more about what the Human Rights Foundation is doing via its Financial Freedom division and subscribe to its Financial Freedom newsletter.
Bitcoin is a tool for all human beings — those across the spectrum of the political right and left — and it’s high time that this message becomes more widespread.
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