“Crypto Choke Point 2.0”: A Window of Opportunity for Europe

The rise of U.S. regulators against cryptocurrencies has given birth to a “Crypto Choke Point 2.0,” restricting crypto companies’ access to banking services in U.S. dollars. With fiat/crypto on-ramps cut off, these businesses are forced to seek alternatives to facilitate transactions and maintain their role as gateways to the crypto economy. Europe, with its more flexible regulatory approach, could seize this opportunity by enabling the development of a Euro stablecoin, providing a strong and reliable alternative to the dollar.

The Origins of Choke Point 1.0

Operation Choke Point 1.0 began in 2013 when many businesses linked to firearms, drugs, lending, and similar industries lost access to banking services in the U.S. This initiative was controversial, mainly because it was never officially voted on by American lawmakers. Instead, it was an unofficial operation attributed to the U.S. Department of Justice (DOJ), allegedly acting under orders from then-President Barack Obama.

However, some believe its true origin lies with the Consumer Financial Protection Bureau (CFPB), first proposed by Elizabeth Warren in 2007. Warren, known as one of the most anti-crypto politicians in the U.S., played a key role in the regulatory crackdown that targeted industries deemed high-risk.

The Rise of Crypto Choke Point 2.0

Crypto Choke Point 2.0 is a discreetly orchestrated effort by U.S. regulators to complicate banking access for crypto-related businesses and projects. The exact start date remains unclear, but it likely began in early 2022. Around this time, JP Morgan suddenly closed the bank account of Uniswap founder Hayden Adams. Responding to Adams’ tweet, former CFTC commissioner Brian Quintenz claimed that the Federal Reserve and the Office of the Comptroller of the Currency (OCC) had pressured banks to sever ties with “risky” entities.

The question is: who issued these instructions? The most likely answer is the Biden administration, or more specifically, the Democratic Party. This wouldn’t be surprising, considering that the most anti-crypto politicians in the U.S. are Democrats, while the most pro-crypto lawmakers are Republicans.

Although Crypto Choke Point 2.0 began in early 2022, its impact on the crypto industry was minimal until recently. This delay was likely due to anti-crypto politicians focusing on the 2022 midterm elections. Additionally, there was no immediate justification for the crackdown—while the collapses of Terra, Three Arrows Capital, and Celsius attracted U.S. political attention, none of these involved banks.

The Collapse of Crypto-Friendly U.S. Banks

The recent failures of Silvergate Bank, Signature Bank, and SVB—previously key banking partners for the crypto sector—are strongly linked to Crypto Choke Point 2.0. These events forced crypto businesses to seek alternative financial solutions.

BCB Group’s Response

In response, crypto banking specialist BCB Group seized the opportunity by offering U.S. dollar payments to its clients. This initiative highlights the urgent need for stable and reliable dollar alternatives for crypto transactions while demonstrating Europe’s ability to innovate and meet market needs.

Binance Seeks an Alternative to the Dollar

Binance, one of the world’s largest cryptocurrency exchanges, has explored alternatives to the dollar for its own stablecoin. Among the options considered, the euro stands out as a potentially stable and reliable currency. A euro-backed stablecoin could provide a strong alternative to the dollar in the crypto and Web3 sectors.

The Finnish Initiative: EUROcoin

Finland recently announced the launch of a new euro-backed stablecoin, “EUROcoin.” Designed to facilitate transactions between Finnish state entities, this stablecoin illustrates the growing interest in a European digital currency. This initiative could inspire other European nations and contribute to building a broader euro stablecoin ecosystem.

Europe’s Opportunity to Compete with the Dollar in Crypto

With U.S. regulations tightening and crypto-friendly banks collapsing, Europe has a chance to lead the crypto market. A euro-backed stablecoin could attract businesses and investors by leveraging the euro’s stability and Europe’s flexible regulations.

Crypto Choke Point 2.0 has restricted banking access for crypto companies, but this challenge is also an opportunity. A euro stablecoin would bypass U.S. restrictions and position Europe as a Web3 and digital asset hub.

Projects like BCB Group and Finland’s EUROcoin show this shift is already happening. Europe must seize this moment to strengthen financial integration, accelerate blockchain adoption, and establish itself as a global leader in the digital economy.