Bitcoin News Today: White House to Penalize Banks for Crypto Debanking in New Executive Order

The White House is preparing an executive order to penalize banks that engage in discriminatory practices against cryptocurrency firms, a move that aligns with President Donald Trump’s broader critique of the financial sector’s treatment of politically aligned or ideologically sensitive clients. The directive, currently in its final stages, aims to address what officials describe as “debanking”—a practice where banks terminate services to certain clients, including crypto entities, based on non-financial criteria. This action is expected to create a more level playing field for crypto companies and reduce the barriers they have historically faced in accessing traditional financial infrastructure [1].

Under the new order, financial institutions that deny banking services to crypto businesses could face monetary penalties or be subjected to consent decrees. The Federal Reserve and the Federal Deposit Insurance Corporation (FDIC) will be tasked with ensuring compliance with existing financial regulations, including the Equal Credit Opportunity Act. These measures are designed to prevent banks from withdrawing support from crypto firms solely based on regulatory pressure or perceived risk. The move could also curb the influence of politically motivated decisions in banking operations [2].

Industry leaders have welcomed the initiative as a step toward legitimizing the crypto sector within the U.S. financial system. Changpeng Zhao, founder of Binance, noted that banks in the U.S. have historically blocked transactions involving cryptocurrency, effectively limiting the sector’s access to essential services. The new policy, if implemented, could open up international banking opportunities for crypto firms and reduce their reliance on offshore financial services [3].

The White House’s approach also reflects a broader effort to challenge what it views as biased lending practices by major banks. President Trump has publicly criticized institutions like JPMorgan and Bank of America for their treatment of his businesses and those of conservative clients. The executive order is seen as a response to these concerns, aiming to hold banks accountable for decisions that do not align with financial risk assessments but instead stem from ideological or political considerations [1].

Analysts suggest that the policy shift could have a ripple effect on the crypto market. By improving access to banking services, the U.S. could see increased liquidity and innovation in the sector, which may accelerate the growth of Bitcoin and Ethereum markets. This regulatory change may also signal to global investors that the U.S. is taking a more pro-crypto stance, encouraging further investment and development [2].

The executive order is expected to mark a significant turning point in the regulatory landscape for crypto-related banking relationships. It introduces a framework under which financial institutions must justify their decisions not on ideological grounds but on financial risk and compliance with existing laws. As the policy moves forward, its success will depend on how effectively it is implemented and how banks adapt to the new expectations [3].

Sources:

[1] White House Preps Order to Punish Banks That ... (https://www.wsj.com/finance/regulation/white-house-preps-order-to-punish-banks-that-discriminate-against-conservatives-8af18854?gaa_at=eafs&gaa_n=ASWzDAguYYY4canQNoEx5rCgCC2XNG7R8UnK6dhyfpDUoLSiyOGWHRkznEsG&gaa_sig=DPwKTHwNyC0Hw60s7XNBMIJYWurovz2kK9ta_IXapEfKd08Ic_3Eh6jh5o-L72pV-ANwqOyoaV43IdJfV7RvBw%3D%3D&gaa_ts=689270d3)

[2] Trump order to target bank discrimination, crypto de-banking (https://www.ledgerinsights.com/trump-order-to-target-bank-discrimination-crypto-de-banking-report/)

[3] Bitcoin Price Holds $115K As White House Targets ... (https://bitcoinmagazine.com/markets/bitcoin-price-holds-115k-as-white-house-targets-bitcoin-and-crypto-debanking-in-new-order)