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Crypto and Fintech Leaders Advocate for Open Banking Rules Against Industry Opposition
Leading voices in the cryptocurrency and fintech ecosystems are rallying to defend open banking regulations, cautioning that weakening these rules could disrupt access to decentralized finance (DeFi) applications, cryptocurrency wallets, and stablecoins. Influential groups like the Blockchain Association, Crypto Council for Innovation, and Financial Technology Association have coordinated efforts to petition former President Donald Trump, urging him to safeguard these essential regulations.
A report by Cointelegraph on July 24 highlighted the joint appeal by these organizations, who sent a letter imploring Trump to shield open banking standards from what they describe as “legal assaults” by major U.S. banks. The letter accuses these banks of impeding the adoption of open banking regulations through lawsuits and imposing prohibitive data access fees on fintech startups and cryptocurrency users, creating significant barriers to innovation within the financial sector.
JP Morgan’s Data Fees Spark Controversy
The debate over open banking intensified after Bloomberg disclosed on July 11 that JPMorgan Chase had announced plans to charge fintech companies fees for accessing customer banking data. These fees, structured based on data usage levels, would reportedly place additional financial strain on payment service providers.
In their letter to Trump, crypto and fintech organizations argued, “Financial data belongs to the American people, not the banks.” They highlighted that the right to control and share financial information freely is fundamental to promoting market competition and safeguarding individual freedom—cornerstones of American values.
Open Banking Rules: At the Heart of a Heated Debate
The petition urged the Trump administration to provide legal clarity on open banking rules by July 29. Industry groups maintain that consumers, not banking institutions, own their personal financial data, and they should be entitled to share this information with third-party applications of their choice—without facing fees or barriers. This legal standoff is expected to have a profound impact on whether U.S. consumers can seamlessly connect their bank accounts to services such as cryptocurrency exchanges, stablecoin wallets, and modern payment platforms.
Open banking allows consumers to securely share their financial data with approved third-party apps using APIs (application programming interfaces). First introduced during Trump’s presidency in 2022, the regulation is scheduled for full implementation by October 22, 2024. It aims to grant Americans more control over their financial data and forms a critical backbone for building infrastructure around stablecoins, DeFi platforms, and crypto-to-fiat bridges.
While the framework promotes financial inclusion and innovation, not everyone supports it. On July 24, the Bank Policy Institute (BPI)—representing several major banks in the U.S.—filed a lawsuit claiming that open banking regulations could compromise security and impose undue burdens on traditional financial institutions. Interestingly, other global markets such as the United Kingdom, Brazil, and the European Union have successfully implemented similar open banking frameworks with notable success.
Big Banks’ Double Play: Opposing Open Banking While Exploring Blockchain
Even as traditional banks contest open banking regulations in court, they are quietly making steady inroads into the digital asset domain. For instance, a Cointelegraph report from May 2024 revealed that 10 prominent U.S. banks, including Wells Fargo and Mastercard, participated in a pilot program to explore tokenized asset settlements. This initiative tested real-time transfers of tokenized bank deposits and U.S. Treasury bonds on a shared blockchain ledger.
JP Morgan, in particular, continues to make waves in the blockchain and crypto space. On July 15, the banking giant filed a trademark for its blockchain-based stablecoin, JPMD. The trademark outlines plans to deliver a wide range of crypto services, including trading, exchange, transfers, and payments processing.
The Growing Battle Over Open Banking and the Future of Finance
The battle lines between traditional financial institutions and the fintech-crypto sector are becoming increasingly clear, with open banking regulations standing at the center of this high-stakes debate. While banks argue against regulatory risks, the fintech and crypto industry views these rules as vital pathways to innovation, competition, and consumer empowerment.
The eventual outcome of this regulatory conflict will reshape how seamlessly traditional finance integrates with emerging digital economies, setting the stage for a new era of financial connectivity and choice.
