Trump's Executive Order to Overhaul Crypto Debanking Policies

President Donald Trump is poised to announce a new executive order that targets regulations impacting the cryptocurrency industry, particularly focusing on the issue of debanking that emerged under the Biden administration.

According to sources, this executive measure aims to counteract measures labeled by industry experts as "Operation Choke Point 2.0," which have been perceived as obstructive to cryptocurrency firms seeking banking services.

Ending Restrictions on Crypto Debanking

This initiative references a previous campaign from the Obama era that sought to inhibit payday lenders and gun dealers, allegedly to shield crypto businesses from accessing essential banking facilities.

The Trump administration is determined to dismantle these barriers, which have hindered the operation of banks that serve the crypto market.

“The Trump Administration is reportedly set to sign an executive order that might revoke certain Federal Reserve policies that have hindered crypto banks from obtaining master accounts. This would be monumental for crypto banks like Custodia Bank, which is currently engaged in legal battles with the Fed over this matter,” noted Eleanor Terrett.

Final details of this executive order are still in the works, but it is likely to focus on Federal Reserve regulations regarding the issuance of master accounts.

Master accounts are vital as they permit banks to conduct transactions directly with the Federal Reserve. Throughout Biden’s tenure, crypto-friendly institutions such as Custodia have continually faced rejections in their applications for these accounts.

In essence, these policies have effectively barred them from accessing critical financial infrastructure. Should these regulations be altered, the US cryptocurrency landscape could experience dramatic changes.

“This development is noteworthy since the Fed and FDIC have yet to retract any anti-crypto directives, despite last month's remarks from Fed Chairman Jerome Powell, who seemed taken aback by the rising number of crypto debanking instances and indicated the Fed would reevaluate its position,” reported Eleanor Terrett.

However, it's important to highlight that the Federal Reserve operates independently and is not mandated to adhere to directives from the White House or Congress.

Any attempts to influence its operational guidelines might meet resistance from central bank authorities.

Trump's Third Executive Order Related to Cryptocurrency

If enacted, this would mark Trump’s third executive order related to the cryptocurrency sector since his return to office. His first order, dated January 23, established a Presidential Working Group on Digital Asset Markets.

His second move initiated a US government Bitcoin reserve alongside a digital asset inventory.

Despite these initiatives, his recent White House Crypto Summit has left many leaders in the industry feeling disenchanted, with widespread sentiments that the discussions were superficial and the proposed Bitcoin reserve strategy failed to invigorate market optimism.

Rather than acquiring new Bitcoin, the administration plans to leverage assets previously confiscated from criminal cases.

Concurrently, broader economic strategies have further unsettled markets, with new tariffs imposed on nations like China, Mexico, Canada, and potentially the EU ruffling traditional market sentiments.

This wave of economic fluctuation prompted institutional investors to withdraw funds from Bitcoin and Ethereum ETFs, culminating in Bitcoin's dip below $80,000 for the first time in four months and Ethereum's slide to $1,870, its lowest price since November 2023.