US Banks Hinder Crypto Growth With High Fees and Restricted Access

US banks are reportedly using financial barriers to hinder the growth of crypto platforms like Coinbase and Robinhood, with tactics including inflated transaction fees and restricted access to banking services. These actions have been dubbed "Operation Chokepoint 3.0" by industry observers, reflecting a strategy aimed at stifling competition in the fintech sector. Alex Rampell, a General Partner at Andreessen Horowitz, highlighted that banks might be deliberately making crypto transactions more expensive and inconvenient to deter users from engaging with these platforms. For example, imposing a $10 fee on a $100 transfer could discourage users from transferring funds into crypto accounts [1]. Rampell also warned that banks may prevent consumers from linking their accounts to crypto or fintech services, effectively forcing reliance on traditional financial products [1].

JPMorgan, one of the largest banks in the US, is accused of actively undermining the crypto industry. Tyler Winklevoss, co-founder of Gemini, noted that JPMorgan halted its efforts to rebuild banking ties with Gemini after he publicly criticized the bank’s actions [1]. These developments signal a growing conflict between traditional financial institutions and the emerging crypto sector, with banks seeking to protect their market dominance by limiting the reach of crypto platforms [1].

Despite these challenges, Coinbase and Robinhood continue to expand their services. Coinbase is planning to introduce tokenized stocks, prediction markets, and derivatives for U.S. customers, aiming to evolve into a comprehensive financial exchange. Meanwhile, Robinhood is expanding its commission-free trading to over 200 tokenized stocks and ETFs across 31 European countries, along with enhanced dividend support to attract more users [1]. These moves demonstrate the crypto platforms’ resilience in the face of banking pressures.

The regulatory landscape in the US also appears to be shifting in favor of crypto growth. The Securities and Exchange Commission (SEC) has introduced pro-crypto regulations, which are seen as an opportunity for platforms to innovate and expand, even as traditional banks attempt to limit their reach [1]. However, the continued use of high fees and restricted access by banks remains a significant challenge to the broader adoption of crypto services.

Industry leaders have raised concerns about the long-term implications of these tactics. Rampell emphasized that if banks succeed in these efforts, it could set a precedent for other institutions to follow, potentially stifling innovation and limiting consumer choice in the financial sector [1]. The outcome of this ongoing tension between traditional banking and the crypto industry will likely shape the future of fintech and digital asset adoption in the US and beyond.

Source: [1] US Banks Allegedly Employ Tactics That Could Challenge Coinbase’s Growth Amid Crypto Expansion (https://en.coinotag.com/us-banks-allegedly-employ-tactics-that-could-challenge-coinbases-growth-amid-crypto-expansion/)