Open banking will keep America at the forefront of financial innovation

Opinion by: Senator Cynthia Lummis 

When people think of digital assets and financial innovation, they often picture Silicon Valley or Wall Street. 

Wyoming, with its vast open spaces, unique economy and remote communities, however, makes a compelling case for why digital assets, fintech and open banking are so important. 

The US Congress passed Section 1033 of the Dodd-Frank Act in 2010, requiring the Consumer Financial Protection Bureau (CFPB) to ensure consumers could access and own their own financial data. 

The open banking section of this law is a bright spot. 

Wyoming as a winner

For example, if a mother in Lovell who kept her money at Big Horn Federal wanted to use a service like Venmo or PayPal to send some money to their college student at the University of Wyoming, they would be able to grant that permission. 

During President Donald Trump’s first term, he initiated the process of developing clear rules that made it easier for consumers to share their banking data — while ensuring proper security and disclosures — so they could easily use financial tools like Venmo and PayPal, and use digital asset exchanges.  

Wyoming and open banking

Open banking is also critical for integrating digital assets into the US economy by promoting competition and enabling consumers to share their data with digital asset exchanges and stablecoin issuers, thereby facilitating faster and cheaper payments.

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In 2024, the Wyoming Legislature passed a law encouraging banks to facilitate open banking. That law followed dozens of digital assets and blockchain-related laws that the legislature has also passed since 2017, intending to make Wyoming the jurisdiction of choice for digital asset companies, much like South Dakota did for credit cards and banking in the early 1980s.

In 2024, the Biden administration finalized the open banking rule, which was immediately challenged in court by major banks that claimed it exceeded statutory limits. The administration also threatened to impose substantial fees on digital asset platforms and financial technology platforms, such as Venmo and PayPal, to deter consumers from using them. 

Banks want to continue to have a monopoly over their most precious asset — your personal data — and scaremonger that no one else can be trusted with your information. This is protectionism, pure and simple.

It’s time for us to adapt the open banking rule to ensure that America remains a global leader in financial services.

Wyoming is a critical case for open banking

Open banking enables access to financial services for rural communities via smartphones and computers. These tools make it easier to build credit using alternative scoring models that use transaction banking or banking data to demonstrate the ability to make timely payments.

Open banking supports small businesses and agricultural operations by providing better cash flow and access to credit. Ranchers, farmers and mom-and-pop shops across Wyoming often rely on seasonal or irregular income. Fintech tools can provide more flexible payment, financing and invoicing options that align with cash flow, but only if consumers have control over their personal data to use these tools. 

Open banking also gives the people of Wyoming access to third-party tools that increase options so they can compare financial products like loans, credit cards and savings, leading to the best possible deals. 

Open banking helps to automate payments, reduce travel and postage, avoid late fees and enhance budgeting and fraud detection.

Open banking and digital assets

Perhaps most importantly, without open banking, there is only limited access to digital assets. There’s no way to connect an existing bank account to a preferred digital asset exchange without the open banking rules of the road. Many big bank leaders like Jamie Dimon have made their opposition to digital assets very clear. Without clear open banking rules, they could prevent customers from connecting accounts to platforms like Kraken and Gemini and completely throttle consumer choice.

Large banks have shown they’ll restrict access for political reasons, targeting industries and individuals they disagree with, including gun manufacturers, churches and even President Trump himself.

The Consumer Financial Protection Bureau  (CFPB) has an opportunity to protect innovation by establishing clear guidelines that put consumers in charge of their own data, broadly define consumers in a way that allows individuals to use third-party tools they need (with proper authorization and disclosures) to access digital assets and financial tools that make their lives and financial futures easier to manage. 

We cannot empower the opponents of digital assets to rewrite the rules in their favor, stifle innovation and increase costs. Throwing up barriers would drive entrepreneurs overseas and weaken America’s leadership in financial technology. 

America is the home of financial innovation, and digital assets are the next frontier. We should welcome responsible builders, not burden them with excessive red tape. 

When consumers have freedom and entrepreneurs can fairly compete, we all win. 

Opinion by: Senator Cynthia Lummis.

This article is for general information purposes and is not intended to be and should not be taken as legal or investment advice. The views, thoughts, and opinions expressed here are the author’s alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.