U.S. Senator Michael Bennet has a bone to pick with banks that forge ties with crypto while the marijuana industry remains mostly shut out of the financial system.
The Colorado Democrat raised those concerns at a Senate Finance Committee hearing on Thursday, where Treasury Secretary Janet Yellen fielded questions from lawmakers on topics such as taxes, interest rates and bank failures.
Signature Bank, Silicon Valley Bank and Silvergate Bank have all collapsed over the past week. Crypto companies made up about 20 percent of deposits at Signature Bank, according to Barron’s.
“Last weekend, Signature Bank failed and almost a fifth of its deposits came from crypto — like they’re not allowed to do anything with marijuana, but apparently they can lay 20 percent of this on crypto — a notoriously unstable, you know, a thing that nobody here even understands,” Bennet said.
Marijuana is legal in 37 U.S. states, according to the American Bankers Association, though the possession, distribution, or sale of it is still illegal on the federal level. Lawmakers have been working on legislation that would allow American banks to offer banking services, adding that banks are often reluctant due to legal and regulatory risks.
Bennet asked for Yellen’s thoughts on whether Signature was doing right by depositors by investing in crypto, which “isn’t even as stable as the marijuana industry.”
"As you pointed out, in the case of marijuana, it is against federal law and that's a barrier unfortunately to appropriate banking services for the industry and it's something the regulators have been looking for solutions to," Yellen said.
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