Until recently, the issue of de-banking remained shrouded in secrecy, known primarily to insiders like myself who have witnessed firsthand its devastating economic and social impact on businesspeople, nonprofit organizations, and "politically exposed persons" both in the U.S. and globally.

Triggering a Wave of Awareness

The situation changed last week when millions of people became familiar with the concept of de-banking after venture capitalist Marc Andreessen appeared on the Joe Rogan podcast. Andreessen discussed the exclusion of politically disfavored individuals and entities from the financial system, focusing specifically on the crypto-assets industry.

His remarks triggered a wave of responses, drawing attention to the broader issue of de-banking in the tech and cryptocurrency sectors. Prominent figures like the Winklevoss brothers, known for their contributions to cryptocurrency exchange development, voiced their frustrations.

Experiences of De-Banking

David Marcus, former leader of Facebook’s Libra/Diem project, commented on how the U.S. Treasury Secretary Janet Yellen allegedly pressured Federal Reserve Chair Jerome Powell to dissuade banks from supporting the project (which was started by Facebook). Similarly, Nick Neuman, CEO of Casa, recounted his experience of being de-banked by Silicon Valley Bank. His company, which offers self-custodial services, faced rejection from nearly 50 banks before finally securing a partnership with one institution.

In her recently published memoir, former First Lady Melania Trump revealed that a bank abruptly terminated her long-standing financial relationship, and her son Barron was blocked from opening a new account at the same institution. While the bank’s name remains undisclosed, the incident highlights the arbitrary and opaque nature of such decisions.

The Devastating Impact of De-Banking

People and entities are being "de-banked" at an alarming rate, meaning their access to financial services is being terminated either by direct political pressures, the weaponization of regulations, or simply as an unintended consequence of other regulations. De-banking is economically isolating not only entrepreneurs in the crypto-assets sector but also a wide range of communities, including international businesses, humanitarian organizations, public individuals, human rights activists, businesses deemed as unethical, and legal immigrants.

The Rise of Sanctions Policy Abuses

I began working on this policy issue in the spring of 2023. While researching sanctions policy, I discovered that malicious political actors around the world were exploiting the financial system to repress their opponents, both domestically and globally. In Nicaragua, for example, activists like Felix Maradiaga have argued that the government has abused the financial system to terminate bank accounts and strip the assets of activists, non-profit organizations, and even the Church.

This understudied policy issue sparked my interest, prompting me to delve deeper into this completely understudied area. I soon realized that sanctions policies were being misused as tools for political repression or financial exclusion, rather than their intended purpose of promoting international cooperation and preventing the proliferation of nuclear materials.

The Impact on Immigrants

De-banking also has a significant impact on immigrants, who face barriers to entry into the financial system due to excessive scrutiny and high costs. Many face exorbitant fees and excessive paperwork requirements, discouraging financial institutions from onboarding them as clients. This "de-risking" practice, where banks terminate or deny services to perceived high-risk clients to minimize compliance burdens, often leaves immigrants without access to even basic banking services such as savings accounts or payment systems.

The Need for Awareness and Action

The rise of de-banking as a political weapon is a wake-up call for all of us to act. Silence only perpetuates these injustices. If we do not act now, the financial system risks becoming a privilege reserved for the few — a battleground for partisan agendas — rather than a neutral platform designed to empower individuals, safeguard their savings, and facilitate economic activity.

We need to continue raising awareness about this crisis and fight for a "Right to Banking." This right must transcend nationality, political beliefs, or economic status, ensuring that no one is arbitrarily excluded from participating in the global economy. Guaranteeing this access is not only an economic necessity but a moral imperative, foundational to modern citizenship and human dignity.

Protecting New Financial Solutions

We also need to protect new financial solutions in the crypto-assets space, as they are key to advancing financial inclusion globally — thanks to their permissionless nature and decentralized structure. To achieve this, we must demand structural reforms that address the flaws in AML/CFT regulations.

These laws must include safeguards to prevent their misuse as tools for political repression or financial exclusion, as well as clear remedies for victims of de-banking. Structural reforms are essential to ensure that neither autocratic politicians nor malicious private sector actors can weaponize the financial system.

Building Momentum for Reforms

Let’s work together, policymakers, industry leaders, and civil society, to build momentum for reforms that preserve the financial system’s integrity, including the protection of the crypto-assets sector. Together, we must ensure that the financial system (traditional and modern financial instruments) remains an inclusive and well-functioning pillar of our market economy.

We owe it to ourselves, our communities, and future generations to take action against de-banking and its devastating impact on individuals, families, and societies around the world. The time for change is now.