Trump to Reverse Biden's Crypto Banking Restrictions, Affecting Fed Policies
1min read President Donald Trump is set to sign an executive order aimed at reversing the Biden administration's policies that have made it challenging for cryptocurrency companies to access banking services. This move is part of a broader effort to support the digital assets industry, which has faced regulatory hurdles under the current administration.
The upcoming executive order is expected to explicitly roll back the rules and regulatory initiatives associated with "Operation Chokepoint 2.0," a policy allegedly implemented by the Biden administration to deny banking services to crypto companies and their executives. This initiative, coined by Castle Island Ventures partner nic Carter, draws parallels to the Obama-era "Operation Choke Point," which targeted payday lenders and firearm dealers.
Bo Hines, the Executive Director of the Presidential Working Group on Digital Assets, confirmed the impending executive order but declined to provide further details. He emphasized the Trump administration's commitment to ending all practices related to Operation Chokepoint 2.0.
While the specifics of Trump's executive order are still being finalized, it is anticipated to impact Federal Reserve policies regarding master accounts. These accounts, held by all federally chartered banks, enable direct payments with and access to the Fed, which is crucial for banks to serve customers nationwide. During the Biden administration, the Fed refused to grant master accounts to crypto-focused banks like Custodia, hindering their growth.
Allowing crypto banks to access the Fed’s services would be a significant development for the digital assets industry. However, Federal Reserve policies are typically independent of the White House, as the central bank's decisions do not require approval from the executive or legislative branches of government.
The Trump administration has been swiftly working to achieve policy goals outside the crypto arena, some of which have already faced legal challenges in federal courts. Senior White House officials are planning to meet to evaluate potential legal hurdles regarding the latest crypto order before presenting it to President Trump for signature.
The order may also extend beyond banking. It is likely to include directives stating that stablecoins, crypto assets designed to maintain a steady price and generally pegged to the U.S. dollar, should not be considered securities.
If Trump signs this executive order, it will be the third crypto-related order he has issued since returning to office. The first, signed on January 23, established a Presidential Working Group on Digital Asset Markets featuring numerous 