The Potential Elimination of Fintech Competition through Excessive Bank Charges (July 2025 Fintech Update) or
In the ever-evolving world of finance, a new development has emerged that could significantly impact the crypto and fintech sectors. Known as Operation Chokepoint 3.0, major banks, including JPMorgan, are imposing high fees, data restrictions, and operational barriers on crypto and fintech apps, effectively squeezing these platforms' ability to interact smoothly with banking services.
This anti-crypto tactic, as some industry insiders and investors like a16z characterize it, could limit competition by increasing costs for users who transfer funds to alternative crypto and fintech services. The move has been met with criticism, with concerns that it could stifle innovation and growth in these sectors.
However, regulatory changes are unfolding that could counterbalance this trend. On June 24, 2025, Federal Reserve Chair Jerome Powell announced an easing of rules allowing U.S. banks to offer crypto services if they maintain proper risk management. This policy shift has encouraged institutional confidence in crypto assets, as evidenced by increased inflows into Bitcoin spot ETFs and greater market activity.
The impact of Operation Chokepoint 3.0 remains mixed in the banking sector. While the Federal Reserve is promoting clearer pathways for banks to engage with crypto and fintech firms, some large banks continue to exercise gatekeeper-like control, potentially limiting crypto and fintech app accessibility through subtle but effective methods.
Meanwhile, in the corporate world, significant changes are also underway. Starling Bank is exploring the acquisition of a nationally chartered U.S. bank and considering a potential listing on the NYSE as part of its expansion plans. Xero announced its acquisition of Melio for an upfront consideration of $2.5 billion, aiming to integrate accounting and payments into a unified platform. Figure recombined its consumer credit marketplace and blockchain-native asset exchange businesses in preparation for a potential IPO this fall.
The U.S. has recently signed into law the GENIUS Act, providing clear rules for stablecoins. Envestnet announced that it had reached an agreement to sell Yodlee, its open finance and data analytics subsidiary, to private equity firm STG. Wealthfront confidentially filed for IPO, while Moment, a company, raised a $36 million Series B and partnered with LPL Financial to modernize the fixed income market through automation.
In the traditional banking sector, Lloyds Banking Group announced its acquisition of Curve, the digital wallet provider, for around $161 million. Revolut entered the Argentine market with the acquisition of Cetelem Argentina from BNP Paribas Personal Finance.
Amidst these changes, one thing remains clear: the future of finance is dynamic and full of potential. As the industry continues to evolve, it will be interesting to see how banks balance their restrictive practices with the new regulatory openness, and how this balance will shape the landscape of crypto and fintech in the coming years.
References: 1. Operation Chokepoint 3.0: Banks Clamp Down on Crypto and Fintech Apps 2. Federal Reserve Eases Rules for Banks to Offer Crypto Services 3. a16z on Operation Chokepoint 3.0: An Anti-Crypto Tactic by Major Banks 4. The Impact of Operation Chokepoint 3.0 on Crypto and Fintech Apps 5. Regulatory Changes Counteracting Operation Chokepoint 3.0
- The anti-crypto tactic, as characterized by investment firm a16z, could potentially limit competition within the fintech industry by raising costs for users using alternative crypto and fintech services due to Operation Chokepoint 3.0's implementation of high fees, data restrictions, and operational barriers.
- The future of finance seems to be laboring under the impact of Operation Chokepoint 3.0, as some large banks exercise control over cryptocurrency and fintech app accessibility, yet regulatory changes, such as those announced by the Federal Reserve allowing U.S. banks to offer crypto services, could counterbalance this trend and ease the landscape for these sectors.
- Technology will likely play a crucial role in the evolution of the business world, with companies like Starling Bank, Xero, Figure, and Wealthfront embracing technology through acquisitions, mergers, and IPOs to modernize their services and compete in the ever-changing financial landscape, including the crypto and fintech sectors.
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