In brief:
₿- A proposed order would direct banking regulators to investigate whether financial institutions unfairly denied services to crypto companies.
₿- The aim is to eliminate internal banking policies like “reputational risk” that may have contributed to debanking lawful digital asset firms.
A U.S. executive order expected this week may significantly impact how banks engage with cryptocurrency businesses. The measure, reportedly backed by President Donald Trump, aims to safeguard crypto firms and other entities from being cut off by financial institutions due to their industry affiliation.
Tackling banking barriers for crypto businesses
According to early drafts, the order would direct banking regulators to examine potential violations of the Equal Credit Opportunity Act, antitrust laws, and consumer protection regulations. Financial institutions found to have denied services unfairly could face enforcement actions or be required to revise internal policies.
The move addresses long-standing concerns among blockchain companies about losing access to essential banking services—often without clear explanations or legal basis. Many in the sector have referred to this trend as a “shadow ban,” claiming that institutions quietly exit relationships with crypto firms due to perceived regulatory pressure rather than compliance risk.
Improving fairness and transparency
The executive order targets internal practices that may have enabled this kind of exclusion. One such policy—“reputational risk”—has been used by banks as a justification for ending relationships with businesses seen as controversial. Critics argue this vague standard gives banks excessive discretion in deciding which lawful industries to serve.
Under the directive, federal regulators would be required to reassess such policies and ensure they align with existing credit and consumer laws. The Small Business Administration (SBA) would also be instructed to review how partner banks treat crypto-related businesses applying for federally backed loans.
Industry impact and banking response
For crypto startups, banking access remains a major obstacle. Without accounts or financial tools, even fully compliant companies face hurdles in operating effectively within the U.S. economy. Improved transparency and oversight could help level the playing field and encourage responsible innovation in the digital asset space.
Banks have begun responding by updating internal policies and consulting with legal and regulatory officials to avoid accusations of discriminatory practices. Some institutions have clarified they do not deny services based on political belief or industry type.
While legal experts note that political affiliation is not currently a protected class under federal law, the focus on fair treatment based on lawful business activity could drive technology improvements and set new industry standards.
Stay informed,
Rodcas Consulting Group