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Highlights
- Donald Trump is reportedly considering an executive order to halt crypto debanking.
- A WSJ report notes that big banks are trying to avoid blacklisting for previous debanking policies.
- The Federal Reserve is changing its playbook for banking supervision, hinting that banks can onboard crypto clients.
U.S. President Donald Trump is reportedly considering an executive order that would limit the ability of financial institutions in the U.S. to “debank” key sectors. Crypto market participants are watching closely as they anticipate potential benefits as the Federal Reserve clarifies its stance on crypto banking services.
Trump May Issue Executive Order on Debanking
According to a report by The Wall Street Journal (WSJ), the Trump administration is exploring an executive order that would bar banks from refusing to provide financial services to certain industries. The report notes that several conservative states have accused major banks of debanking industries for political rather than economic reasons.
The WSJ also reports that representatives from large U.S. banks have begun discussions with government officials to address allegations of sector-specific debanking. Executives from JPMorgan Chase, Wells Fargo, and Citibank have reportedly met with officials in Texas and Oklahoma regarding the debanking of gun manufacturing and energy companies.
In parallel, several industries, including the crypto sector, are preparing for an executive order that would prevent U.S. banks from denying services. The proposed order could have far-reaching effects, potentially requiring financial institutions to provide banking services to crypto companies. The WSJ reports that Trump’s Domestic Policy Council, led by Vince Haley, is expected to draft the order.
Just yesterday, the Federal Reserve eliminated “reputational risk” as a factor in bank examinations. This criterion had previously penalized banks for servicing certain industries. The Office of the Comptroller of the Currency (OCC) and the Federal Deposit Insurance Corporation (FDIC) have also removed this clause from their respective regulatory handbooks.
Jerome Powell Says Banks Can Offer Crypto Banking Services
Meanwhile, in recent congressional testimony, Federal Reserve Chair Jerome Powell stated that banks can offer services to crypto companies. He added that U.S.-based financial institutions may also engage in crypto-related activities, provided they comply with existing regulations.
“Banks get to decide who their customers are and that’s not our decision,” said Powell. “Banks are free to provide banking services to the crypto industry and crypto companies.”
The Federal Reserve had previously taken what many saw as a “hostile stance” toward banks serving crypto firms, prompting criticism. However, following the OCC and FDIC’s more lenient positions, the Federal Reserve is now backtracking on its approach to crypto banking.
Moreover, incoming legislation under the Donald Trump administration, such as the proposed GENIUS Act, reflects the broader efforts at positive crypto regulation.
Notably, Bank of America is developing a stablecoin, and JPMorgan has announced plans to pilot its JPMD token on the Base network. Other U.S.-based financial institutions are also flashing plans to roll out a range of crypto-based services for clients.
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