White House prepares executive order to target banks discriminating against conservatives and crypto companies.

White House prepares executive order to target banks discriminating against conservatives and crypto companies.

The White House is reportedly preparing an executive order aimed at addressing claims of political and digital asset bias in banking. This move comes as part of ongoing efforts to ensure fair access to financial services for all businesses, including those in the cryptocurrency sector. The executive order, if signed, could significantly impact how banks operate and interact with customers, particularly those in the digital asset industry.

According to a draft order viewed by The Wall Street Journal, the White House intends to penalize banks that unfairly cut off customers based on political reasons rather than legitimate financial risks. The draft order directs bank regulators to investigate whether financial institutions have violated the Equal Credit Opportunity Act, antitrust laws, or consumer financial protection laws. Violators could face monetary penalties, consent decrees, or other disciplinary measures [1].

The executive order is part of the Trump administration’s ongoing efforts to address debanking, the practice where banks and financial institutions restrict or sever relationships with crypto businesses and clients allegedly based on political bias. In January, Trump signed an order directing agencies to remove regulatory hurdles and expand banking access for blockchain businesses. This move follows concerns over debanking, which have led to executive actions aimed at ensuring crypto firms have fair access to financial services [2].

The draft order also criticizes the role that some banks played in an investigation into the Jan. 6, 2021, riots at the U.S. Capitol. Additionally, it references an instance where Bank of America was accused of shutting down the accounts of a Christian organization operating in Uganda based on the organization’s religious beliefs. The bank has said it shut down the accounts because it doesn’t serve small businesses operating outside the U.S. [2].

The impact of this executive order could be significant for both banks and crypto firms. For banks, it could lead to increased regulatory scrutiny and potential penalties for past actions. For crypto firms, it may open doors to more stable and accessible financial services, reducing the risk of sudden account closures. This could foster greater business stability and support the broader adoption of digital assets [3].

Navigating Future Regulatory Scrutiny
While the executive order promises positive change, it also highlights an era of increased regulatory scrutiny for banks. Financial institutions must now carefully evaluate their customer offboarding policies to ensure they are based on objective financial risk assessments, not subjective biases. This development underscores the evolving relationship between traditional finance and the digital asset economy. Both banks and crypto firms will need to adapt to these new guidelines, with collaboration and clear communication being crucial for effective navigation of this new regulatory environment [3].

The anticipated White House executive order represents a pivotal moment for the cryptocurrency industry. By directly addressing bank bias, the administration seeks to ensure fair access to financial services for all legitimate businesses. This move could unlock significant opportunities for innovation and growth within the crypto space, fostering a more equitable and robust financial system for the future [3].

References:
[1] https://cryptobriefing.com/crypto-banking-discrimination-white-house/
[2] https://www.livemint.com/global/white-house-preps-order-to-punish-banks-that-discriminate-against-conservatives-11754357462598.html
[3] https://bitcoinworld.co.in/white-house-executive-order/