Business Sandesh Indian Newspaper | Articles | Opinion Pieces | Research Studies | Findings & News | Sandesh News
Caitlin Long, a well-known advocate for crypto-friendly banking and the founder of Custodia Bank, has issued a stark warning: the debanking of crypto businesses is far from over and may continue until at least January 2026. Her comments highlight ongoing challenges in securing banking services for crypto firms, despite increasing mainstream adoption of digital assets.
What is Crypto Debanking?
Crypto debanking refers to financial institutions cutting off or restricting services to businesses involved in cryptocurrency. This includes:
- Closing accounts of crypto exchanges, startups, and investors.
- Blocking transactions related to crypto trading and blockchain payments.
- Increasing regulatory scrutiny on crypto-friendly banks.
Why is Crypto Debanking Still Happening?
Long believes the war on crypto banking stems from a mix of regulatory pressure, risk concerns, and traditional financial institutions protecting their dominance. Several key factors contribute to this ongoing issue:
1. Operation Choke Point 2.0
Some analysts, including Long, argue that regulators are informally pressuring banks to distance themselves from crypto. This echoes the controversial Operation Choke Point, a past U.S. policy that targeted industries deemed high-risk by the government.
2. Bank Failures and Risk Aversion
The collapse of crypto-friendly banks like Silvergate, Signature, and Silicon Valley Bank in 2023 led to increased caution among financial institutions. Many banks have since tightened their policies on servicing crypto businesses.
3. Regulatory Uncertainty
Governments worldwide are still debating how to regulate stablecoins, DeFi, and digital assets. Without clear guidelines, many banks see crypto as a compliance risk and prefer to avoid it altogether.
What Happens in January 2026?
Long suggests that by 2026, the regulatory landscape may shift, potentially easing restrictions on crypto banking. This could happen due to:
✅ New legislative frameworks clarifying crypto banking rules.
✅ Increased pressure from institutional investors seeking exposure to digital assets.
✅ Greater public demand for fair access to financial services for crypto users.
Is There a Path Forward for Crypto Banking?
Despite the challenges, there are potential solutions that could help bridge the gap between crypto and traditional banking:
- Crypto-native banks: Institutions like Custodia Bank aim to provide compliant financial services tailored for crypto businesses.
- Decentralized finance (DeFi): Some argue that DeFi could reduce reliance on traditional banks, though it comes with its own risks.
- Regulatory collaboration: Constructive engagement between policymakers and crypto firms could lead to better banking access.
Caitlin Long’s warning signals that crypto debanking is not over yet, and businesses in the space must remain prepared for at least two more years of banking challenges. However, as regulatory clarity improves and demand for crypto-friendly banking grows, the tide may eventually turn.
Do you think crypto businesses will gain easier access to banking services before 2026, or will the debanking trend continue? Share your thoughts.
