In recent years, U.S. banks have shifted their tactics in battling fintech companies and cryptocurrencies, a change known as Chokepoint 3.0. This strategy includes economic pressures on the market.
How Chokepoint 3.0 Works
Alex Rampell, a partner at Andreessen Horowitz, outlines three key tactics behind Chokepoint 3.0:
1. **High Fees:** Banks are allegedly raising transaction costs and transfer fees, making access to crypto platforms less appealing. 2. **Restricted Data Access:** Fintech apps often rely on user-permissioned data from banks. By limiting or delaying access to this information, traditional banks can slow or disrupt competing services. 3. **App Blocking and Limitations:** There are reports of banks placing restrictions on crypto app usage or refusing to process transactions linked to digital asset services.
JPMorgan in the Spotlight
Rampell specifically points to JPMorgan as one of the institutions pushing this agenda. He suggests that the bank is deliberately raising the cost of moving funds to platforms like Coinbase and Robinhood, aiming to make traditional banking services seem more favorable by comparison. This raises concerns among crypto advocates and entrepreneurs, who argue that these moves stifle competition and harm consumer choice in financial services.
Implications for Fintech and Crypto Innovations
If Chokepoint 3.0 gains momentum, it could threaten the progress made by fintech and crypto innovators in democratizing finance. The industry must remain vigilant to protect open access and fair competition.
The implications of implementing Chokepoint 3.0 strategies could have long-term effects on the fintech and crypto markets, necessitating constant monitoring from stakeholders in these industries.
