US Senator Cynthia Lummis States America "Must Never Return to Chokepoint 2.0 Era"
Cynthia Lummis Opposes Returning to Chokepoint 2.0
US Senator Cynthia Lummis stated that America "must never return to the Chokepoint 2.0 era," characterizing the Biden administration's regulatory pressure on the crypto industry and banking access as a policy path that suppresses innovation.
"Chokepoint 2.0" is not an official project name of the US government, but rather a political label used by the crypto industry and some Republican lawmakers to describe a type of regulatory phenomenon: banking regulators, law enforcement agencies, or prudential regulatory pressure that makes it harder for banks to provide accounts, payment, custody, settlement, and credit services to crypto companies.
This term borrows from the historical name "Operation Choke Point," which was an anti-fraud initiative promoted by the US Department of Justice during the Obama administration, focusing on payment processing and categories of merchants deemed high-risk; the "2.0" narrative in the crypto industry points to the situation where digital asset companies are de-risked, have their accounts closed, or face a reduction in services by banks.
Lummis's remarks were in response to Trump's criticism of crypto regulation during the Biden administration. Reports quoted Trump as saying that the policies constituted a "brutal attack" on the crypto industry, causing innovation to flow out and benefiting China; this reflects a political stance rather than independent causal proof of policy effects.
For crypto companies, banking channels are the infrastructure for fiat currency inflows and outflows, customer fund segregation, payroll, taxation, transaction clearing, and stablecoin reserve management. Even if on-chain protocols can continue to operate, if companies cannot consistently obtain compliant bank accounts, their trading, custody, issuance, market-making, and payment operations will still be significantly restricted.
In market mechanisms, crypto exchanges, stablecoin issuers, custodians, mining companies, and payment firms are the buyers of stable banking services; commercial banks, payment institutions, compliance technology companies, and audit service providers are the suppliers. If the political and regulatory environment shifts to support banks serving crypto clients under controlled risk conditions, compliant custody, payment, stablecoin settlement, and trading infrastructure will benefit; existing financial intermediaries relying on regulatory uncertainty to maintain competitive barriers, as well as high-leverage crypto businesses with inadequate risk control, will face repricing.
Source: Public Information
ABAB AI Insight
Lummis has long been one of the most active lawmakers in the US Congress advocating for digital asset legislation. She, along with New York Senator Kirsten Gillibrand, introduced the "Responsible Financial Innovation Act" in 2022, attempting to establish a framework for digital asset classification, taxation, and market regulation; since then, she has continued to promote legislation on Bitcoin as a strategic reserve, stablecoin rules, and market structure. Her opposition to the logic of "Chokepoint 2.0" is not merely a defense of trading speculation, but rather a belief that banking access should occur under clear rules, capital constraints, and anti-money laundering requirements, rather than being replaced by regulatory uncertainty.
The key to the capital pathway lies in the connection between stablecoins and the banking system. Circle's USDC relies on reserve asset custody, bank accounts, and redemption channels; PayPal's PYUSD also requires regulated issuance and fiat exchange arrangements; trading platforms like Coinbase and Kraken depend on commercial banks to handle customer funds and payment network access. The so-called "de-banking" would push funds toward offshore platforms, opaque intermediaries, or informal channels, thereby reducing the visibility of US regulators over transactions, customer identities, and capital flows.
A historical analogy is the general period of caution that US banks exhibited towards crypto companies from 2013 to 2017. During that time, exchanges and mining companies often faced account terminations, interstate payment restrictions, and multiple compliance reviews; however, with Coinbase's IPO, the development of regulated custody, and large banks exploring digital asset services, some access barriers began to be replaced by institutionalized products. After the turmoil in the crypto market in 2023 with Silvergate and Signature Bank, banks' risk appetite has contracted again, indicating that crypto finance has not escaped the constraints of traditional financial cycles and regulatory credit.
Essentially, this is about regulatory change. Banks are not passive payment conduits, but rather risk nodes in the US financial system that bear responsibilities for customer identification, transaction monitoring, capital buffers, and suspicious activity reporting. If the government uses vague regulatory pressure to push banks away from the entire industry, it will result in compliant enterprises and high-risk entities being equally excluded; if the government completely relaxes access, it will re-concentrate depositor risk, anti-money laundering risk, and stablecoin redemption risk within the banking system. The real institutional dividing line is not "whether to allow crypto," but whether licenses, reserves, audits, capital, and enforcement responsibilities can be clearly allocated.
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