- Binance CEO Changpeng Zhao has emphasized the importance of increasing the number of fiat onramps in the crypto space
- Zhao highlighted this as one of the major challenges in bringing the next 100 million cryptocurrency users
- “Operation Choke Point 2.0” has seen financial institutions preventing customers from buying crypto with their money
Binance CEO Changpeng Zhao has said that crypto can only continue to grow if there are more onramps to allow customers to easily enter the marketplace. Speaking at the Token 2049 conference in Singapore, Zhao warned that the ecosystem will stall if onramps continue to be taken away, noting that institutions that used to facilitate them have withdrawn from the space over regulatory fears. Zhao’s comments echo a groundswell of opinion that governments are pressuring banks and other financial service providers to reduce such services, hoping it will choke the ecosystem by preventing new liquidity from entering it.
Financial Institutions Pulling Away
At the conference, where Zhao was speaking remotely, he was asked his opinion on what the major challenges were to bringing the next 100 million cryptocurrency users:
Today, to be very frank, it’s actually fiat ramps. With tightening regulations in the earlier part of this year, we’re seeing a lot of traditional institutions that used to provide fiat ramp channels pull away.
Zhao’s comment echoes a pattern that has in fact been evident since the end of the last bull run in 2021, with the options for getting money from your bank account into the cryptoverse harder; many banks have either restricted the amount you can spend on crypto per month, while others have banned account holders, including credit card holders, from buying crypto with them altogether.
Operation Choke Point 2.0
The movement has become so ubiquitous that it even has a name: Operation Choke Point 2.0 (the original Operation Choke Point was an Obama Justice Department effort to lean on banks that served gun manufacturers, payday lenders and other legal but undesirable industries). The theory may have seemed far-fetched in its earliest incarnations, but there is no denying, as Zhao pointed out, that financial institutions have, either off their own backs but more likely through backdoor government pressure, pulled up the drawbridge to crypto investment.
Of course, there are still plenty of ways to invest in the crypto space, but if the onramps become fewer and further between, or even more difficult to use, the new blood needed to grow the space will be blocked at source, leaving the space starved of what it needs to continue its exponential growth.