In 2013, under President Obama's administration, the U.S. government unveiled a controversial initiative known as Operation Choke Point.
This program, a collaboration between the Department of Justice (DOJ), Federal Deposit Insurance Corporation (FDIC), and the Office of the Comptroller of the Currency (OCC), was designed to clamp down on fraud by pressuring banks to sever ties with businesses deemed high-risk. It effectively used banking systems as a weapon against private businesses.
The initiative drew sharp criticism as many of these businesses, including payday lenders, coin dealers, and gun shops, were legal entities.
Critics argued that the operation was less about fraud prevention and more about targeting politically disfavored industries.
By 2017, amidst growing concerns and pushback, Operation Choke Point was officially terminated.
We are the first to admit that we hate payday lenders. We would love to see them regulated, but that is not the same as using banking as a weapon against them.
Operation Choke Point 2.0 Under Biden
Fast forward to the Biden administration, and whispers of a renewed Operation Choke Point began to circulate.
This so-called "Operation Choke Point 2.0" seemed to pick up where its predecessor left off, with the government once again leveraging its influence over the banking sector.
This time, however, the crosshairs appeared to be squarely focused on the burgeoning cryptocurrency industry.
A series of regulatory directives, bank announcements, and statements from key figures in the Biden administration have raised alarms about a coordinated strategy to isolate the cryptocurrency sector from traditional banking.
The CBDC Connection: A New Financial Frontier
The Biden administration's interest in the financial sector doesn't stop at Operation Choke Point 2.0.
Another significant development has been the push towards introducing a Central Bank Digital Currency (CBDC) in the U.S.
A CBDC, essentially a digital version of the national currency, offers many potential benefits, including improved financial inclusion and more efficient payment systems. However, its introduction also raises concerns.
Given the history of using banking as a tool to exert influence and control, the potential launch of a CBDC under the Biden administration has been met with skepticism.
Critics argue that a CBDC could provide the government with unprecedented visibility into every financial transaction, effectively eliminating the buffer currently provided by commercial banks and payment services.
This direct link between the government and individual financial activity could be seen as an extension of the principles behind Operation Choke Point, only on a much larger and more technologically advanced scale
What's more, there are loads of examples of governments using this sort of power as a weapon against its citizens.
"In China, the Communist Party is using a central bank digital currency to track the spending habits of its citizens. The data is being used to create a social credit system that rewards or punishes people based on their behavior," said U.S. representative Tom Emmer (R-MN) in a committee meeting on September 20, 2023.
"Closer to home in the Western Hemisphere, in Canada, the Trudeau Administration froze the bank accounts of individuals involved in the 2022 trucker protests. That might work in Canada, that doesn't work here," Emmer continued.
"This appetite for financial surveillance may be gaining a stronghold, unfortunately, right here at home. The White House issued an Executive Order placing urgency on central bank digital currency research and development, and the agency reports to that executive order have made it clear that the Biden Administration is not only itching to create a CBDC, but they are willing to trade American's right to financial privacy for a surveillance-style central bank digital currency."
From Operation Choke Point in 2013 to the potential introduction of a CBDC in the present day, the U.S. government's relationship with the banking sector has been marked by attempts to leverage financial systems for broader policy goals.
While the intentions behind these initiatives may vary, the underlying theme remains consistent. The power of banking as a tool for influence and control. As the financial landscape continues to evolve, the balance between government oversight and individual financial freedom will remain a topic of heated debate.