President Donald Trump is about to sign an executive order that could force the Federal Reserve to allow crypto firms into the country’s banking system, according to a report from Decrypt on Monday. The order is expected to roll back Biden-era restrictions that prevented crypto-friendly banks from gaining access to master accounts, a crucial requirement for directly interacting with the Fed’s payment system. The move targets what many in the crypto industry call “Operation Chokepoint 2.0”, an alleged campaign by regulators to cut off banking services to crypto companies and executives. Bo Hines, Executive Director of the Presidential Working Group on Digital Assets, apparently told Decrypt that: “I think that the industry can expect something in short order there.” Forcing the Fed to open its doors to crypto banks Under former president Joe Biden, the Federal Reserve consistently refused to grant master accounts to crypto-focused banks like Custodia, blocking them from accessing the country’s core financial infrastructure. Without these accounts, American banks are forced to rely on middlemen, making it impossible for them to provide nationwide financial services. Trump’s executive order will reportedly attempt to reverse these restrictions and allow crypto banks to operate on equal footing with traditional financial institutions. While the Federal Reserve is technically independent, meaning its policies don’t require presidential approval, Trump has shown that he is prepared to challenge that position. According to the report, legal advisors are meeting Thursday to evaluate potential challenges before the order lands on Trump’s desk. The goal is to eliminate any remaining barriers preventing crypto firms from accessing financial services. Republicans push to eliminate “reputational risk” from banking decisions The battle over crypto banking access isn’t just happening at the White House. Just last week, Tim Scott, Chairman of the Senate Banking Committee, introduced the Financial Integrity and Regulation Management (FIRM) Act, a bill designed to ban reputational risk as a reason for denying banking services. Scott argued that regulators have weaponized reputational risk to block financial access for industries they don’t like. “Eliminating reputational risk is the way we allow our banks to make decisions on creditworthiness, not on fear of America’s regulators,” Scott said . Crypto debanking has been a major issue for years, with Republicans linking it to the original Operation Choke Point, an Obama-era Justice Department initiative that targeted firearm dealers and payday lenders by pressuring banks to cut them off. The crypto industry wholeheartedly believes that Operation Chokepoint 2.0 is simply an extension of that policy. Crypto executives like Coinbase’s Brian Armstrong and Anchorage’s Nathan McCauley have testified in congressional hearings that happened in January and February, claiming that the Fed, FDIC, and OCC all plotted together to systematically push crypto businesses out of the US banking system. Trump’s order, if signed, will be his third major crypto-related executive action since returning to office. His first, signed on January 23, created a Digital Asset Stockpile and the Presidential Working Group on Digital Asset Markets. Trump’s second executive order, signed last week, created a strategic Bitcoin reserve, though it came along with other cryptocurrencies. Now, with this latest order, Trump is taking direct action against banking restrictions, setting the stage for a major showdown between the White House and financial regulators. Cryptopolitan Academy: Tired of market swings? Learn how DeFi can help you build steady passive income. Register Now
