Operation Choke Point is a 2013 initiative of the United States Department of Justice (DOJ). Its stated goal is to reduce fraud by higher-risk businesses. Their approach? Investigate banks and payment processors for business they perform with these industries and require them to more carefully scrutinize their behavior.
On the surface, it sounds like this may help reduce fraud. However, this new policy requires banks and payment processors to expend energy and resources beyond the investment they currently make with similar rules today. In fact, banks and payment processors currently already have these policies in place.
The industries that seem to be on the as-yet-undisclosed DOJ list include as-seen-on-TV companies, gun shops, payday lending companies, internet gambling sites, medical cannabis businesses, and others. Although these businesses may be morally objectionable to some people, they are all legal in the jurisdictions in which they operate. So, what is real goal of the DOJ using such a heavy-handed approach?
Some believe the initiative was created for political reasons, specifically to support the agenda of the administration. Certain goals of the government have not been achieved yet using legal means, that is, by Congress creating new laws, the function of Congress. So, the administration has apparently created new rules to move its agenda forward. What is this agenda? Well, it most likely includes limiting some of these businesses access to buyers, including for legal gun shops.
Banks and payment processors will make is much more difficult, or even prevent, legitimate businesses from gaining or retaining access to banking due to this policy. This has already happened to legal cannabis businesses in Colorado, where they have been prevented from opening bank accounts due to federal policy trumping state laws with regards to legal businesses. Therefore, these cannabis businesses are cash-only today. Given the concerns about money laundering, these seems like a negative, unintended consequence that only makes the problem worse by requiring un-trackable cash to be used in these businesses.
However, my argument isn’t just about what may be considered overreach by the government. My point is much more interesting than that. I believe this policy is an example of government using a political and administrative “hammer” that is made of wood, not metal. What do I mean? That is, this ruling has much less impact than it would have had just a few years ago! (Hence, the lighter, softer, wooden hammer.) The reason why is bitcoin.
There have always been governments looking to quash unpopular ideas, empires looking to discredit people with morally objectionable behaviors, and business leaders looking to achieve their anti-competitive goals. These have often been done under the guise of doing what’s right for the population, claiming to be representatives of the people. Yet, the truth is that a few dominate the many in policy creation. At least kings didn’t have to pretend that they always had the good of the people in mind.
However, since its launch in 2009, a new worldwide option called bitcoin has become available. Bitcoin is the first viable option to replace fiat currencies, the sovereign currencies of the various countries that most of us use today. The Bitcoin option has and will continue to diminish the impact of these heavy-handed and objectionable methods imposed by governments. Bitcoin still isn’t as easy to use as the US Dollar, but it is quickly catching up and catching on.
Limiting access to banking still carries a sting today for legitimate businesses that may be unpopular with the government, yet they no longer need to prevent them from doing business altogether. The days of governments controlling legitimate businesses by keeping them “unbanked” is coming to an end due to the brave and brilliant people who are building the worldwide crypto networks starting with bitcoin. With cryptos, governments and their currencies are no longer required to conduct business. Freedom over our wealth and control of our money is here now and gaining momentum with bitcoin.
So, I’ll finish my blog today with thanks. Thank you to the current rulers of governments, to those living in an outdated paradigm of the world and its assumed total control over the money supply. Thanks for putting the politicized environment of control to limit businesses you may find objectionable front-and-center. Thanks for subverting the proper working of republics and democracies, more clearly that you have in the past. Thanks for making it clearer that using your fiat currencies today is riskier than ever due to arbitrary administrative controls, bailouts and bail-in’s, and seizing bank account funds without proof or trial.
Be assured that your strategy will eventually backfire. People have a right to operate and benefit from legal businesses. And legality is not for the executive branch to determine, but rather for the legislative branch, the representatives of the people. Policy by administrative decree is not law.
We bitcoin enthusiasts thank you for creating the extra momentum needed to accelerate bitcoin adoption. Whether you agree with my arguments or not, this will only help bitcoin and cryptos. Thanks, and keep up the good work!