On August 7, President Donald Trump made a bold move that crypto advocates have been waiting for: signing an executive order to stop the "discriminatory" banking practices that have been plaguing the industry. Apparently, the government's idea of fair play was to force banks into shutting down accounts for crypto firms, all in the name of "reputational risk."
Trump's executive order now bars federal regulators from pressuring banks to halt services for legal businesses simply because they deal with crypto. No more closing accounts or disrupting payroll because of some vague "risk" concerns. We’re talking about legal, law-abiding companies being left high and dry.
Operation Choke Point 2.0
This is all part of the Trump administration’s battle against what the crypto world has dubbed “Operation Choke Point 2.0.” Sounds ominous, right? While it’s not an official program, it’s pretty much a shady, behind-the-scenes effort to choke out crypto companies by convincing banks to close their doors. The reason? Allegedly, their "reputational risk" makes them a liability, even if these firms are completely legal. It’s like getting kicked out of the club for having the wrong brand of shoes.
Critics argue that this new strategy echoes the failed tactics of the 2010s DOJ, where the government tried to block industries like payday lenders and firearms businesses from accessing banking services. The only twist? This time, it's all about crypto.
Since early 2023, many crypto companies have reported being suddenly debanked, with little to no warning, as regulators’ whispers about "risk" caused banks to pull the plug. The uncertainty this created for startups and institutional players was stifling, leading many to question whether the regulatory environment could even be trusted anymore.
Trump’s executive order isn’t just a “talk the talk” move. It codifies the steps already taken by agencies like the Federal Reserve, FDIC, and the OCC, which have promised to stop judging banks based on reputational risk when it comes to crypto.
And if that wasn’t enough, this executive order aligns with legislation being discussed in Congress, where lawmakers are pushing for stricter limits on how regulators can interfere with emerging industries. Looks like Trump isn’t just making headlines; he’s drawing a line in the sand for crypto businesses in the U.S.
All in all, Trump’s order could be the lifeline the crypto industry needs to break free from the chokehold of vague regulatory pressures.
Kristian Koch
Disclaimer: All materials on this site are for informational purposes only. None of the material should be interpreted as investment advice. Please note that despite the nature of much of the material created and hosted on this website, HODL FM is not a financial reference resource, and the opinions of authors and other contributors are their own and should not be taken as financial advice. If you require advice. HODL FM strongly recommends contacting a qualified industry professional.
