resistancemoney on Nostr: 10 THESES ON DEBANKING 1. Debanking, in the target sense, is when lawful payments or ...
10 THESES ON DEBANKING
1. Debanking, in the target sense, is when lawful payments or enterprises are blocked from banking services, because they are, to use a nice phrase from Nick Carter: "politically disfavored".
2. Debanking can occur at the explicit and written direction of regulators, or through more hidden means, as with off-the-record phone calls or vague gestures at limiting 'risky' activity so as to avoid costly audits — or worse.
3. Off-the-record governance of this kind undermines the rule of law, trust in institutions, and innovation. It's hard to build a law-abiding business when you don't know if you'll get kicked out of the system, for secret reasons you can't even share in public.
4. Some recent cases of debanking involve lawful but, to many, distasteful enterprises – crypto token pump shops, for example. Others involve family and friends of unpopular politicians. Yet other examples are more sympathetic: human rights activists, independent journalists, or whistle-blowers.
5. Since these examples run the ideological and moral gamut, it's probably most useful to keep 'debanking' as a purely descriptive term, rather than to gatekeep its application to, say, just the sympathetic cases.
6. Debanking in the modern era began with Operation Chokepoint, under the Obama administration. Though the first Trump administration ended that program, it implemented debanking structures of its own, including the campaign against Libra/Diem in 2019. The pattern continued under the Biden administration with the inauguration of Chokepoint 2.0. There is, by now, little doubt that politicized debanking happens.
What's at issue now is what to do about it.
7. Modern banking systems are neither entirely public nor entirely private. They are, instead, a curious hybrid. This hybrid character undermines arguments like 'it's a free world, and payment rails are privately owned, so financial services should be able to block customers they find risky'.
8. There is something of a paradox, then, at the heart of the issue. Here's how Justin Slaughter puts it:
- No individual bank should be required to bank any particular customer
- No industry that is not clearly prohibited by law should be refused a bank account
It is by no means obvious how to design a system that respects both constraints.
9. There is no purely political or policy solution to this paradox. Congress, the Fed, Article 3 courts, the Executive, CFPB, FDIC — any of these institutions *could in theory* be used to untangle the mess. But in truth, empowering them further is unlikely to have that effect, since they are themselves political institutions.
10. The way forward lies, instead, in developing and using payment and banking rails that are genuinely open for all — beyond the easy capture of regulators or corporate structures alike. Thus David Marcus: “you have to build it on the most neutral, decentralized, unassailable network and asset..."
1. Debanking, in the target sense, is when lawful payments or enterprises are blocked from banking services, because they are, to use a nice phrase from Nick Carter: "politically disfavored".
2. Debanking can occur at the explicit and written direction of regulators, or through more hidden means, as with off-the-record phone calls or vague gestures at limiting 'risky' activity so as to avoid costly audits — or worse.
3. Off-the-record governance of this kind undermines the rule of law, trust in institutions, and innovation. It's hard to build a law-abiding business when you don't know if you'll get kicked out of the system, for secret reasons you can't even share in public.
4. Some recent cases of debanking involve lawful but, to many, distasteful enterprises – crypto token pump shops, for example. Others involve family and friends of unpopular politicians. Yet other examples are more sympathetic: human rights activists, independent journalists, or whistle-blowers.
5. Since these examples run the ideological and moral gamut, it's probably most useful to keep 'debanking' as a purely descriptive term, rather than to gatekeep its application to, say, just the sympathetic cases.
6. Debanking in the modern era began with Operation Chokepoint, under the Obama administration. Though the first Trump administration ended that program, it implemented debanking structures of its own, including the campaign against Libra/Diem in 2019. The pattern continued under the Biden administration with the inauguration of Chokepoint 2.0. There is, by now, little doubt that politicized debanking happens.
What's at issue now is what to do about it.
7. Modern banking systems are neither entirely public nor entirely private. They are, instead, a curious hybrid. This hybrid character undermines arguments like 'it's a free world, and payment rails are privately owned, so financial services should be able to block customers they find risky'.
8. There is something of a paradox, then, at the heart of the issue. Here's how Justin Slaughter puts it:
- No individual bank should be required to bank any particular customer
- No industry that is not clearly prohibited by law should be refused a bank account
It is by no means obvious how to design a system that respects both constraints.
9. There is no purely political or policy solution to this paradox. Congress, the Fed, Article 3 courts, the Executive, CFPB, FDIC — any of these institutions *could in theory* be used to untangle the mess. But in truth, empowering them further is unlikely to have that effect, since they are themselves political institutions.
10. The way forward lies, instead, in developing and using payment and banking rails that are genuinely open for all — beyond the easy capture of regulators or corporate structures alike. Thus David Marcus: “you have to build it on the most neutral, decentralized, unassailable network and asset..."