Michaela
Summary: What is the goal of Trump’s proposed executive order on banking?
The draft executive order aims to prevent banks from cutting off customers based on their political or religious beliefs. It directs regulators to investigate whether banks have violated existing laws and penalize them if so. It also seeks to protect access to banking for crypto firms and conservative nonprofits.
The White House has reportedly begun drafting an executive order that would prohibit banks from cutting ties with customers based on political or religious beliefs, as concerns about ideological bias in the financial system have gained traction among conservatives and crypto advocates.
A draft executive order viewed by The Wall Street Journal directs federal banking regulators to examine whether financial institutions have violated laws such as the Equal Credit Opportunity Act, antitrust provisions, or consumer protection regulations. Banks found in breach could face penalties, including fines, consent decrees, or other enforcement actions.
The draft executive order reportedly cites several politically charged cases, including a 2023 incident involving Bank of America. The bank was accused of closing the accounts of a Christian charity based in Uganda. At the time, Bank of America said the decision was based on the organization’s policy of not supporting small businesses operating abroad.
Furthermore, the draft order noted the involvement of certain financial institutions in federal probes related to the January 6 Capitol riots. It urged regulators to scrutinize and remove any internal policies that may have led to customer exclusions based on reputational risk or ideological beliefs.
On the crypto side, the draft order reportedly calls on the Small Business Administration (SBA) to review how banks handle loan guarantees, a move seen as critical for blockchain startups and conservative nonprofits that rely on reliable access to banking services.
Crypto firms have repeatedly flagged what they describe as backchannel pressure from regulators, claiming it has led banks to quietly distance themselves from the industry, especially after the collapse of several crypto-friendly institutions.
Changpeng Zhao, founder and CEO of crypto exchange Binance, commented on the executive order in a recent post on X. “It used to be that corresponding banks in the US block transactions involving crypto (fiat for buying crypto),” Zhao wrote.
In December, U.S. Securities and Exchange Commission (SEC) Commissioner Hester Peirce, widely referred to in the crypto community as “crypto mom,” voiced concern over federal efforts to restrict the crypto industry’s access to banking services, especially around custody. Peirce specifically called out “Operation Choke Point 2.0,” warning that such actions could undermine innovation and transparency in the digital asset space.
Operation Choke Point 2.0 refers to alleged efforts by U.S. regulators to discourage banks from servicing crypto firms by increasing scrutiny and regulatory pressure. Though not an official program, the term is used within the industry to describe a perceived pattern of informal guidance and enforcement tactics aimed at cutting off crypto companies from the traditional financial system.
As regulatory pressure builds, the new executive order adds fresh uncertainty around crypto’s access to banking. With policy still in flux, the industry faces a critical turning point in its U.S. future.
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Michaela has no crypto positions and does not hold any crypto assets. This article is provided for informational purposes only and should not be construed as financial advice. The Shib Magazine and The Shib Daily are the official media and publications of the Shiba Inu cryptocurrency project. Readers are encouraged to conduct their own research and consult with a qualified financial adviser before making any investment decisions.
