Custodia Bank CEO Warns Crypto Debanking Challenges May Last Until 2026

Caitlin Long, the founder and CEO of Custodia Bank, has warned that the cryptocurrency industry in the United States may continue to face debanking challenges until January 2026. This prediction comes despite recent positive legislative developments aimed at supporting the crypto sector. Long's comments were made during an appearance on Cointelegraph’s Chainreaction daily X show on March 21, where she highlighted the ongoing regulatory hurdles faced by the industry.

Long emphasized that the Federal Reserve, currently controlled by Democrats, remains a significant obstacle in the path of cryptocurrency regulation. She noted that the situation is likely to remain contentious until President Trump has the opportunity to appoint a new Federal Reserve Governor in January 2026. This appointment could potentially shift the regulatory landscape in favor of the cryptocurrency industry, providing much-needed relief from the current debanking efforts.

The debanking efforts have been a substantial operational challenge for the cryptocurrency industry. Long revealed that Custodia Bank has been repeatedly targeted by these efforts, resulting in months of lost work and financial costs amounting to "a couple of million dollars." The industry's frustration reached a peak when a lawsuit spearheaded by Coinbase in June 2024 revealed letters showing that US banking regulators had asked certain financial institutions to "pause" crypto banking activities. This revelation sparked industry outrage and highlighted the extent of the regulatory pressure on crypto firms.

The debanking issue is not confined to the United States; it is also a significant challenge for European cryptocurrency firms. Anastasija Plotnikova, co-founder and CEO of blockchain regulatory firm Fideum, stated that debanking remains one of the main operational issues for both small and large crypto firms in the EU. Plotnikova's personal experience includes having her accounts closed multiple times between 2017 and 2022, although 2024 was reported to be a better year operationally. This underscores the widespread nature of the debanking problem and its impact on the global cryptocurrency industry.

The US Office of the Comptroller of the Currency (OCC) recently eased its stance on how banks can engage with crypto, just hours after President Trump vowed to end the prolonged crackdown on crypto firms' access to banking services. Trump's remarks were made during the White House Crypto Summit, where he declared an end to Operation Chokepoint 2.0. However, despite these positive developments, the industry continues to face significant hurdles in accessing banking services. The ongoing debanking efforts underscore the need for a more cohesive regulatory framework that supports the growth of the cryptocurrency industry.

As the industry awaits potential regulatory changes in 2026, it remains to be seen how these developments will shape the future of cryptocurrency banking in the United States and beyond. The cryptocurrency industry's ability to navigate these challenges will be crucial in determining its long-term viability and growth. The ongoing efforts to debank the industry highlight the need for a more supportive regulatory environment that recognizes the potential of cryptocurrencies and blockchain technology.