1/ Innovators need to be aware of an under-the-radar issue where the banks are poised to notch a victory at crypto & consumer expense: the open banking rule. Let me break it down for you.

2/ In October 2020, the Trump CFPB released the 1033 open banking rule, giving consumers clear rights to their own data. Under the rule, Americans can share their own data freely with the apps and services they choose.

3/ Now - let me start by saying I agree the CFPB's very existence is an offense to the Constitution. While SCOTUS has allowed it to exist, I believe that to be a grievous error.

4/ But the open banking rule is conservative at its core – YOU own your information, not JPM. It's the digital equivalent of walking into a bank and asking for your transaction history – you'd be surprised if there was a $100 fee for the printout.

5/ Predictably, the banks sued the day this rule became final, and they've made measurable progress in gutting it. It would be a mistake to fall victim to their lobbying campaign.

6/ This open banking fight brings to mind CA’s refusal to enforce noncompetes, which is widely credited with fueling dynamism in tech. Meanwhile states like MA, which enforced strict noncompetes, saw tech ambitions stall as employees were locked in place.

7/ The same dynamics apply in finance & crypto: when consumers can't port data, entrenched players face little pressure to improve. When's the last time you saw a big bank build a cool budgeting or payment app? Say Zelle and I will smack you.

end/ Gutting the open banking rule would cement the position of incumbent banks, which benefit when customers are trapped by data silos and friction - they can then expand their market position, even when their products are meaningfully worse.