Solana teams pick up on debanking narrative

The debanking narrative has given fresh ammunition to teams building bank replacements

share


This is a segment from the Lightspeed newsletter. To read full editions, subscribe.


When Marc Andreessen went on The Joe Rogan Experience and said 30 of a16z’s portfolio founders had been debanked, or had their bank accounts closed arbitrarily, a chorus of crypto figures joined in to cry foul on the US banking system.

While discontent with the banking system is obviously nothing new in crypto, the debanking narrative — the extent of which we still know relatively little about — has given fresh ammunition to teams building bank replacements. On Solana, projects from onchain banks to subscription services are making their case for the debanked and unbanked to sign up. What’s unclear is whether today’s banking alternatives can succeed where past iterations have failed.

After the Joe Rogan podcast went live, Squads Labs director of research Shimon Newman began working on a report on the contours of a federal conspiracy to debank crypto entrepreneurs and startups — known in crypto as Operation Chokepoint 2.0. An early version of the report shared with Lightspeed highlights how US regulators’ perceive that there is a lot of risk associated with crypto — a perception that extends to fintech and payment service providers. As a result, there has been a large number of debankings, though detailed data on the exact number of crypto-related debankings remains scarce.

Newman’s report cites data saying an estimated 0.1% of laundered money is intercepted by current anti-money laundering efforts, and less than 1% of crypto volume is illicit. But whether or not the crypto crackdown is worthwhile, Squads is capitalizing on it: The startup’s smart wallet app has begun offering a “virtual US bank account” that can accept bank transfers and convert dollars into stablecoins for low fees. It does not offer credit-related services like taking out a loan, Newman said.

Iron is also building an “onchain bank” on Solana, though its founder’s public messaging has focused on the benefits of stablecoins rather than the scourge of debanking in recent days.

CFX Labs founder Nick Cavet shilled me today on his startup’s idea for “rebanking,” where USD deposits can be tokenized and essentially run on rails alongside the traditional banking system.

Serj Korj, co-founder of Solana incremental subscription app DePlan, started another initiative called Subdoor that lets people pay for subscriptions in crypto. He has leaned into the debanking narrative as well, though he pointed out in text messages that there are far more people who are unbanked — or never had bank access to begin with — in the world.

The narrative that banks are too opaque and free from accountability for wrongdoing has caught a second wind from debanking, but it’s not a new story. History suggests any crypto-ification of banking would require regulators to get on board too. And for some, the debanking narrative has already passed.

“Debanking is a year old story. And fintech eye rolls cuz it’s a 10 year old story,” Cavet said in a text.


Start your day with top crypto insights from David Canellis and Katherine Ross. Subscribe to the Empire newsletter.

Explore the growing intersection between crypto, macroeconomics, policy and finance with Ben Strack, Casey Wagner and Felix Jauvin. Subscribe to the Forward Guidance newsletter.

Get alpha directly in your inbox with the 0xResearch newsletter — market highlights, charts, degen trade ideas, governance updates, and more.

The Lightspeed newsletter is all things Solana, in your inbox, every day. Subscribe to daily Solana news from Jack Kubinec and Jeff Albus.

Tags

Upcoming Events

Javits Center North | 445 11th Ave

Tues - Thurs, March 18 - 20, 2025

Blockworks’ Digital Asset Summit (DAS) will feature conversations between the builders, allocators, and legislators who will shape the trajectory of the digital asset ecosystem in the US and abroad.

Brooklyn, NY

TUES - THURS, JUNE 24 - 26, 2025

Permissionless IV serves as the definitive gathering for crypto’s technical founders, developers, and builders to come together and create the future.If you’re ready to shape the future of crypto, Permissionless IV is where it happens.

recent research

Research Report Templates.jpg

Research

The L2 ecosystem has evolved into a complex landscape, with over $17B in market value and $50B in secured assets. While traditionally seen as high-beta plays on Ethereum, no L2 token achieved a beta higher than 1.0 relative to ETH in 2024. Furthermore, token dilution significantly impacted the sector, with a 1% increase in circulating supply corresponding to a 1.4% decrease in returns.

article-image

Trump’s token is setting the “tone” for crypto, Empire co-host Santiago Santos said

article-image

A pair of fundraises by Tapestry and Oh both came with expansive ideas about the future of AI and the role of humans in it

article-image

The Calamos Bitcoin Structured Alt Protection ETF — January is set to offer “systematic risk management” across its roughly one-year outcome period

article-image

Crypto industry elites (and a journalist or two) donned black tie at the Crypto Ball Friday night

article-image

Solana sees new highs in SOL prices, DEX volumes and REV

article-image

President-elect Donald Trump launching his own coin may have sent crypto on an entirely new path