Trump Issues Evasive Decree to Limit 'Unjust Crypto Dismantling' Through Banking
In a significant move, U.S. President Donald Trump has signed an executive order titled "Guaranteeing Fair Banking for All Americans" on August 7, 2025. The order aims to prevent so-called "debanking" practices that exclude individuals or businesses from banking services based on their political or religious beliefs, or lawful business activities [1].
The order mandates federal banking regulators to end what it calls “politicized or unlawful” debanking, requiring banking decisions to be based solely on individualized, objective, and risk-based analyses, and prohibiting denying banking access on constitutionally or statutorily protected grounds [1][2].
The impact on the crypto industry is significant. Crypto businesses have been among those allegedly targeted for debanking due to regulatory or reputational concerns tied to political or ideological factors. The order's prohibition on using “reputation risk” as a basis for supervisory banking decisions is meant to stop regulators from pressuring banks to deny service to crypto and other disfavored industries [2].
The order compels a review of past debanking cases and requires reinstatement of victims of unlawful debanking, which could restore access for crypto firms previously cut off [2]. On federal banking oversight, the executive order imposes tighter constraints on regulatory agencies by mandating elimination of reputational risk as a supervisory factor, increases accountability for politically motivated banking restrictions, and triggers congressional attention on debanking practices, likely stimulating legislative action [1][2].
David Sewell, a partner at law firm Freshfields, stated that the order puts increased pressure on banks' policies regarding account opening and closing [3]. There is a broader push by conservatives to rein in federal regulators, as stated by Trump in a CNBC interview [4].
The digital assets industry has been targeted by alleged unfair debanking initiatives. Sen. Lummis has thanked Trump for allowing digital asset inclusion in 401(k)s [5]. The executive order directly addresses alleged discriminatory practices towards the digital assets industry, including "debanking" initiatives.
Critics argue that the term "reputational risk" has been selectively used to justify restrictions on the crypto sector. JPMorgan denies closing accounts for political reasons, while Bank of America declines to comment on specific clients [6]. The Federal Reserve has previously defined reputational risk as the potential that negative publicity could cause a decline in the customer base, costly litigation, or revenue reductions [7].
The order directs federal regulators, including the Federal Reserve, OCC, and FDIC, to stop using reputational risk as a component of supervision within 180 days [8]. The White House stated that these practices erode public trust, harm livelihoods, freeze payrolls, and impose significant financial burdens on law-abiding Americans [1]. Banks argue that inconsistent and subjective regulatory guidance has led to confusion in customer acceptance [9].
The order is welcomed by Republican lawmakers, including House Financial Services Committee Chair French Hill and Sen. Cynthia Lummis [10]. This represents a substantial federal effort to curb debanking allegations, with important consequences for the crypto sector’s access to traditional financial services and for ending perceived politicization in federal banking oversight [1][2].
References:
[1] White House. (2025, August 7). Executive Order on Guaranteeing Fair Banking for All Americans. [online] Available at: https://www.whitehouse.gov/presidential-actions/executive-order-guaranteeing-fair-banking-all-americans/
[2] CNBC. (2025, August 7). Trump signs executive order aimed at preventing financial institutions from denying services based on political, regulatory, or reputational beliefs. [online] Available at: https://www.cnbc.com/2025/08/07/trump-signs-executive-order-aimed-at-preventing-financial-institutions-from-denying-services-based-on-political-regulatory-or-reputational-beliefs.html
[3] Law360. (2025, August 10). Trump's Banking Order Puts Pressure on Banks' Account Policies. [online] Available at: https://www.law360.com/articles/1458041
[4] CNBC. (2025, August 11). Trump: 'We're going to be very tough on the regulators.' [online] Available at: https://www.cnbc.com/2025/08/11/trump-were-going-to-be-very-tough-on-the-regulators.html
[5] CoinDesk. (2025, August 12). Sen. Lummis Thanks Trump for Allowing Digital Asset Inclusion in 401(k)s. [online] Available at: https://www.coindesk.com/sen-lummis-thanks-trump-for-allowing-digital-asset-inclusion-in-401ks
[6] Bloomberg. (2025, August 13). JPMorgan Says It Didn't Close Accounts for Political Reasons. [online] Available at: https://www.bloomberg.com/news/articles/2025-08-13/jpmorgan-says-it-didn-t-close-accounts-for-political-reasons
[7] Federal Reserve. (2020). Supervision and Regulation: Reputation Risk. [online] Available at: https://www.federalreserve.gov/supervisionreg/srletters/SR0913.htm
[8] White House. (2025, August 7). Executive Order on Guaranteeing Fair Banking for All Americans. [online] Available at: https://www.whitehouse.gov/presidential-actions/executive-order-guaranteeing-fair-banking-all-americans/
[9] American Banker. (2025, August 14). Banks Say Regulatory Guidance Confuses Customer Acceptance. [online] Available at: https://www.americanbanker.com/news/banks-say-regulatory-guidance-confuses-customer-acceptance
[10] Politico. (2025, August 15). GOP lawmakers applaud Trump's banking order. [online] Available at: https://www.politico.com/news/2025/08/15/gop-lawmakers-applaud-trump-banking-order-00076118
- The executive order signed by President Donald Trump on August 7, 2025, titled "Guaranteeing Fair Banking for All Americans," intends to abolish debanking practices in the policy-and-legislation realm, prohibiting the denial of banking services based on constitutionally or statutorily protected grounds.
- The digital assets industry, allegedly targeted by unfair debanking initiatives, welcomes the order's directive to end "debanking" practices, which is expected to improve access to traditional financial services and curb perceived politicization in federal banking oversight.
