Trump’s Executive Order Could End Crypto Debanking Once and For All

• For political reasons, Trump is preparing an executive order to stop banks from refusing crypto companies and other businesses. 

• Banks that discriminate could face heavy fines and enforcement actions under federal laws. 

• The move could end Operation Chokepoint 3.0 and give crypto firms better access to traditional banking services.

The White House is preparing an executive order to combat banking discrimination against cryptocurrency firms and politically targeted businesses. The proposed measure would prevent banks from refusing services to crypto companies based on their industry or political associations, marking a significant shift in federal banking policy.

The executive order specifically targets what industry observers call “Operation Chokepoint 3.0,” the latest iteration of alleged coordinated efforts by financial institutions to restrict banking access for certain sectors. This practice has particularly affected cryptocurrency businesses, fintech companies, and companies in politically sensitive industries.

Banking Penalties and Enforcement Mechanisms

The draft order proposes substantial penalties for financial institutions that violate existing federal laws. Banks found guilty of discriminatory practices could face enforcement actions under the Equal Credit Opportunity Act, antitrust regulations, and consumer financial protection laws.

The administration’s concerns over debanking have led to executive actions to ensure crypto firms have fair access to financial services. Government agencies would gain authority to levy fines, enforce compliance agreements, and implement disciplinary measures against violating institutions.

The move directly responds to Republican criticism of major Wall Street banks. Congressional Republicans and Republican-led states have accused financial giants of practicing “woke capitalism” by severing ties with gun manufacturers, fossil fuel companies, and conservative-aligned businesses.

Crypto Industry Impact and Market Response

Since the Biden administration, the cryptocurrency sector has faced mounting challenges accessing traditional banking services. Industry leaders have documented widespread debanking incidents, with Elon Musk asserting that more than 30 tech founders were “secretly debanked”.

JPMorgan Chase has drawn particular scrutiny for its policies affecting crypto platforms. The bank reportedly halted cryptocurrency exchange Gemini’s re-onboarding process following public criticism from Gemini co-founder Tyler Winklevoss regarding the bank’s data access policies.

Binance founder Changpeng Zhao responded positively to the development, suggesting the executive order could “open banking for crypto internationally.” The proposed changes could significantly impact how major financial institutions interact with blockchain businesses and cryptocurrency platforms.

Trump’s executive order will seek to roll back anti-crypto banking rules of the Biden administration and could target key Fed policies. The administration views these regulatory changes as essential for spurring economic growth and driving innovation in the financial technology sector.

The executive order aims to bridge the gap between traditional banking and cryptocurrency systems. The government hopes to foster a more inclusive financial landscape supporting established institutions and emerging blockchain technologies by eliminating discriminatory banking practices.