JPMorgan Chase is thinning the herd of stablecoin payment firms. This week, the bank restricted access for at least two startups, including Blindpay, The Information reported. These firms provide the critical link between the U.S. dollar and emerging market stablecoin users.
The bank cited the high risk of jurisdictions like Venezuela for the move. However, the decision effectively functions as a strategic flex of institutional muscle to protect its own digital dollar dominance.
The timing of these freezes follows a year of massive growth for stablecoins in the remittance sector. Startups now move billions of dollars across borders faster and cheaper than the legacy SWIFT system.
By severing the banking rails for these companies, JPMorgan restricts payment corridors that compete with its own wholesale settlement products.
A Selective Compliance Standard
JPMorgan currently operates its own permissioned blockchain called Kinexys (formerly Onyx). This internal network processes roughly $2 billion in daily volume for the bank’s global corporate clients.
The bank justifies its internal crypto activity through a “closed-loop” system where it controls every participant. External startups like Blindpay offer an open alternative.
They use public blockchains to reach unbanked populations. JPMorgan views this as a liability.
The bank claims these firms cannot sufficiently verify the source of funds in volatile markets.
This stance allows the bank to “de-risk” by removing clients that challenge its market share. This creates a regulatory moat that only the largest financial institutions can cross.
The Remittance War for the Last Mile
The battle for the “last mile” is a primary driver of this conflict. Stablecoin settlement volume reached parity with Visa in 2024.
This growth happened because startups successfully bypassed traditional bank fees. Legacy remittance fees in Latin America remain a significant burden for consumers.
Sending money through traditional banks costs an average of 6 to 8%. In specific corridors, those fees can exceed 15 percent. Stablecoin networks reduce these costs to less than 1%.
Startups rely on JPMorgan to hold their fiat reserves and process withdrawals. When a bank freezes these master accounts, the startup cannot fulfill its promise of instant liquidity.
It forces users back to the expensive, traditional services the banks control.
Chain Street’s Take
JPMorgan isn’t afraid of stablecoin risk. It is afraid of losing the fees.
By freezing these accounts, the bank is performing a tactical strike on the competition. It uses the “high-risk” label to push out startups that make remittances too cheap for the bank’s comfort.
This isn’t just about Venezuela or KYC. It is about who owns the rails for the digital dollar.
JPMorgan wants a world where the only “safe” digital dollar is one moved on a JPMorgan network. The bank is betting that by restricting the bridge-builders today, it can own the entire highway tomorrow.
Wall Street has decided the digital dollar is too important to leave in the hands of startups.
