Trump's Executive Order: A Boost for Crypto Firms' Banking Woes?

Trump is planning an executive order to prevent banks from denying services to crypto firms, which could enhance crypto stability and encourage institutional adoption in the U.S. President Donald Trump is reportedly set to sign an executive order to safeguard crypto firms from banking discrimination, fulfilling his pro-crypto campaign promises. The order would prohibit banks from refusing services to digital asset firms solely based on their industry or perceived political leanings, potentially impacting the crypto industry significantly. This move comes in response to pressure from conservative states accusing major U.S. banks of discrimination against sectors like cryptocurrency, firearms, and energy due to ideological bias. Democratic Senator Elizabeth Warren has also urged the Trump administration to investigate banks accused of denying services based on political affiliation or industry type.

Executives from JPMorgan Chase, Wells Fargo, and Citibank have engaged in discussions with officials from Texas and Oklahoma to address concerns raised. The initiative is seen as a response to 'Operation Chokepoint 2.0', an alleged effort by the Joe Biden administration to cut off crypto firms from banking services. The collapse of crypto-friendly institutions in March 2023 raised concerns of a systemic crackdown. With Trump's return, federal officials may introduce protections for digital asset businesses, potentially restoring banking access and attracting institutional investors.

Despite the pro-crypto stance of the Trump administration, concerns about crypto debanking persist. While Trump aims to end 'Operation Chokepoint 2.0' and ease SEC rules, challenges in banking access remain. Federal Reserve Chair Jerome Powell stated that banks can serve crypto firms if they comply with regulations, offering some optimism. However, complete resolution is yet to be achieved. The alignment between Trump's administration and the Fed indicates a shared direction on crypto policy.