U.S. Banks Use Economic Barriers to Hinder Crypto Growth

Major U.S. banks are reportedly implementing a new strategy dubbed “Chokepoint 3.0” to suppress the growth of crypto and fintech companies, according to Alex Rampell, a general partner at Andreessen Horowitz (a16z). This follows the formal end of the previously criticized “Operation Chokepoint 2.0,” which involved government pressure on banks to cut ties with crypto firms. The latest approach, however, relies not on regulatory crackdowns but on economic barriers such as high fees, restricted data access, and app limitations [1].

Rampell explains that traditional banks are using these tactics to make crypto platforms less attractive to consumers. For instance, raising transaction costs when users attempt to transfer funds to platforms like Coinbase and Robinhood makes traditional banking seem more cost-effective by comparison. Additionally, by restricting or delaying access to user data, banks hinder the functionality of fintech and crypto apps. In some cases, financial institutions are reportedly blocking transactions related to digital asset services altogether [1].

JPMorgan has drawn particular attention in this context, with allegations that the bank is increasing the cost of moving money to crypto platforms. Rampell highlights that such actions could discourage users from engaging with decentralized finance services and tilt the market in favor of traditional institutions. This strategy, while not overtly regulatory, could significantly slow the progress of fintech and crypto innovation [1].

The situation is further complicated by conflicting moves within U.S. regulatory bodies. While the White House has officially ended Operation Chokepoint 2.0, Coinbase has filed legal motions accusing the FDIC of withholding documents related to the policy, including “pause letters” that allegedly directed banks to distance themselves from crypto services. The exchange is calling for full transparency and accountability, arguing that the FDIC’s actions undermine public trust [1].

Meanwhile, the SEC is taking a different approach. In a recent speech, SEC Chairman Paul S. Atkins stated that most crypto assets do not qualify as securities, marking a departure from previous interpretations. Atkins also outlined a regulatory modernization plan that includes new frameworks for crypto asset issuance, custody, and trading. These efforts aim to foster innovation while maintaining market stability [3].

Collectively, these developments illustrate a fragmented regulatory landscape. While some agencies are removing barriers, others are reinforcing or expanding restrictions. This duality reflects broader tensions between innovation and risk management in the financial sector. As banks, regulators, and exchanges adjust to these shifting dynamics, the future of crypto in the U.S. remains uncertain, with legal and policy battles likely to shape the industry’s trajectory [1][3].

Sources:

[1] Coinbase Accuses FDIC of Hiding Operation Chokepoint – (https://cryptonews.com/news/coinbase-accuses-fdic-of-hiding-operation-chokepoint-2-0-files/)

[3] White House Crypto Report: 10 Insights Every Investor – (https://www.ccn.com/education/crypto/white-house-crypto-report-insights-for-investors/)