Trump Order Penalizes Banks for Crypto Debanking
President Donald Trump is set to sign an executive order, dubbed Operation Choke Point 2.0, to curb crypto debanking and ban ideological bias in banking. The order instructs federal regulators – the Federal Reserve, OCC and FDIC – to probe banks that cut ties with crypto firms and conservative groups, potentially violating antitrust, consumer protection or equal credit laws. It mandates the removal of internal “reputational risk” policies used to justify account terminations and empowers the SBA to review lending partners for political discrimination. Non-compliant institutions could face fines, consent decrees and heightened DOJ and Fed scrutiny. Banks have begun updating guidelines, pledging not to factor political risk into banking decisions, while legal experts caution the order may face challenges without new congressional authorization. Crypto companies and traders view the move as a boost to market confidence, lowering crypto debanking risk and improving access to banking services.
Bullish
In the short term, the executive order reduces the risk of banks cutting off crypto firms, enhancing banking access and liquidity, which is likely to boost trading volumes and market sentiment positively. Over the long term, clearer regulatory protection may encourage more institutions to serve digital asset businesses, fostering sector growth and stability. Although potential legal challenges could introduce uncertainty, the net effect is a bullish signal for the cryptocurrency market.