Marc Andreessen, on The Joe Rogan Experience, said that thirty of a16z’s portfolio founders have been debanked – or had their banks accounts arbitrarily closed – and a chorus joined to protest the US financial system.
While discontent with the banking system is obviously nothing new in crypto, the debanking narrative — the extent of which we still know relatively little about — has given fresh ammunition to teams building bank replacements. Projects from subscription services to onchain banks are urging the unbanked, and those who have been debanked, to join Solana. It’s not clear whether the banking alternatives of today can be successful where previous iterations failed.
After the Joe Rogan podcast went live, Squads Labs director of research Shimon Newman began working on a report on the contours of a federal conspiracy to debank crypto entrepreneurs and startups — known in crypto as Operation Chokepoint 2.0. An early version of the report shared with Lightspeed highlights how US regulators’ perceive that there is a lot of risk associated with crypto — a perception that extends to fintech and payment service providers. There have been many debankings as a consequence, but detailed data about the number of crypto related debankings is still scarce.
Newman’s study cites statistics that say less than 1% (or 0.1%) of cryptocurrency volume is illegal. Squads, a startup that offers a smart wallet application has started offering cryptocurrency. “virtual US bank account” This service can be used to accept transfers from banks and convert US dollars into stablecoins at low costs. Newman stated that it does not provide credit services such as taking out loans.
The iron is used to build an “onchain bank” On Solana though, its founder has been focusing on benefits of stablecoins instead of the scourge debanking.
Nick Cavet of CFX Labs shilled on my idea today for his startup. “rebanking,” The traditional banking system can run alongside the tokenized USD deposit.
Serj Koj, the cofounder of Solana’s DePlan incremental subscription app, has launched another initiative named Subdoor. This allows users to subscribe using cryptocurrency. He has leaned into the debanking narrative as well, though he pointed out in text messages that there are far more people who are unbanked — or never had bank access to begin with — in the world.
It’s no secret that debanking gave a boost to the storyline about banks being too opaque, and not held accountable for any wrongdoing. However, this isn’t a brand new narrative. The history of crypto-ification in banking suggests that regulators would also have to be on board. Debanking has become a thing of the past for many.
“Debanking is a year old story. And fintech eye rolls cuz it’s a 10 year old story,” Cavet is mentioned in the text.
Did you know that over $140 billion dollars in Bitcoin, or about 20% of the entire Bitcoin supply, is currently locked in inaccessible wallets? Or maybe you have lost access to your Bitcoin wallet? Don’t let those funds remain out of reach! AI Seed Phrase Finder is here to help you regain access effortlessly. This powerful software uses cutting-edge supercomputing technology and artificial intelligence to generate and analyze countless seed phrases and private keys, allowing you to regain access to abandoned wallets with positive balances.
