The crypto industry is currently facing a major challenge in its efforts to secure reliable banking partnerships. Just recently, three of the largest crypto-friendly banks have been forced to shut their doors to certain companies, leaving them with limited options.
This development, according to a report by Forkast, has raised alarm bells among US stakeholders and market watchers.
As this trend continues, digital currency companies may find it increasingly difficult to navigate the financial landscape, hampering their ability to grow and innovate.
Crypto Industry Suspects Coordinated Regulatory Push To ‘Unbank’
The crypto industry has been grappling with a major setback lately, as several crypto-friendly banks have stopped providing services to firms in the industry. The move has sparked concerns among industry experts and stakeholders, who suspect a coordinated regulatory effort to “unbank” the crypto sector.
According to a report, Nic Carter, a general partner at Castle Island Ventures, has named the narrative “Operation Choke Point 2.0,” which suggests that the regulatory actions taken against banks such as Silvergate Bank, Silicon Valley Bank (SVB), and Signature Bank are part of a larger plan to restrict banking partnerships in the cryptocurrency industry.
Regulators’ Dislike Of Crypto
Regulators have often expressed their reservations towards the industry, with some seeing decentralization as a potential threat to the financial system. However, Vadim Yarmak, the CEO of blockchain marketing firm PRMR, believes that regulators understand that digital currency is here to stay and that no amount of strong-arming or opaque legalese can make it go away.
The impact of these regulatory actions is felt by firms like Binance, the world’s largest crypto exchange, whose US wing has struggled to find reliable banking partners to serve as fiat on-ramps since the shutdown of Signature Bank, according to The Wall Street Journal. Due to this struggle, some USD deposit services have been temporarily halted.
Total market cap of cryptocurrencies currently at $1.21 trillion on the daily chart at TradingView.com
Digital Currency Industry Searches For Solutions
The recent closure of crypto-friendly banking services has left the industry in a precarious situation, with limited options for reliable banking partnerships.
While the sector continues to grow and innovate, the regulatory push to “unbank” the industry could impede its progress. As a result, many firms in the industry are searching for new solutions to overcome this hurdle.
One potential solution is to foster positive dialogue between regulators and industry stakeholders. By engaging in constructive conversations and demonstrating the value and potential of the digital currency sector, the industry may be able to earn the trust and support of regulators, leading to more favorable regulatory policies.
-Featured image from GoodTherapy