Trump Targets Anti-Crypto and Conservative Bias in Banking
Donald Trump is preparing to sign an executive order that will order U.S. banks to cease debanking crypto firms and conservative voices in a move that could affect the U.S. economy as well as politics.
As per the draft obtained by The Wall Street Journal, the directive will instruct banking regulators to conduct a full-blown investigation into whether financial institutions are in violation of antitrust, consumer-protection, or fair-lending laws when cutting off services to certain customers. If found guilty, the offender may have to pay hefty fines.
A Direct Challenge to Alleged Bias in Banking
This executive order seems like Trump’s reply to the long-standing concerns of the crypto community and other conservative groups that the current administration has been weaponizing financial regulations against them. It’s possible the order could be signed this week, although insiders said it could be delayed or changed before it gets done.
A crypto ban conspiracy theorist spoke about the narrative around the SEC’s proposed ban of the spot Bitcoin exchange-traded fund (ETF). This alleged tactic, called “Operation Choke Point 2.0,” is a nod to a campaign from the 2010s that went after payday lenders and other “high-risk” businesses.
Legal Pressure from Coinbase and the FDIC’s Role
The Chief Legal Officer at Coinbase, Paul Grewal, has, in the past, expressed his criticism against the SEC. He has appeared in front of Congress since then, where he said the FDIC had been very aggressive in pursuing banks over their crypto activities. Ultimately, he said, many banks capitulated under this pressure.
Through a Freedom of Information Act (FOIA) lawsuit filed by Coinbase, documents highlighted that the FDIC advised some banks to suspend crypto-related services. This finding corroborates the view that many in the industry held – that the FDIC was crypto paranoid.
Scrapping Anti-Crypto Policies
Trump’s order would additionally investigate the matter, according to the draft. Banking regulators are called on to repeal any rule or policy that may have fostered the censorship practices. It will additionally give command to the U.S. Small Business Administration (SBA), asking it to investigate whether its loan practices unfairly exclude small businesses.
Officials would be instructed to refer any serious violations to the Department of Justice (DOJ) for further action, giving teeth to the order.
Political Debanking Under Fire
But the executive order doesn’t stop at crypto. It also focuses on what Trump’s allies call “political debanking.” They claim that it is the targeting of conservatives.
The article mentions that while the draft doesn’t name specific banks, it criticizes institutions accused of aiding federal agencies during probes into the January 6 Capitol riots — something viewed by some on the right as an overreach and breach of privacy.
Conservative groups have taken to the courts alleging that they are being refused access to banking because of their politics. Banks claim this is related to eligibility for sanctioning accounts, calling the aforementioned practice and this one “de-risking.”
But authorities are beginning to resist such discretion. In June, the Federal Reserve (Fed) said it would stop looking at banks’ reputational risk like the Office of the Comptroller of the Currency (OCC) and the FDIC did before it.
What This Means for the Future
If Trump signs the executive order, it could change the entire relationship between banks, regulators, and politically sensitive industries like crypto. There is increasing concern about the use of financial regulation as an ideological bludgeon.
