U.S. President Donald Trump is preparing to sign a new executive order aimed at penalizing financial institutions that have engaged in so-called “debanking” practices—cutting off services to clients over ideological concerns.
As reported by Bloomberg, a senior official confirmed that the order will direct federal bank regulators to review customer complaint data and take action against banks found to have unfairly denied services. Institutions working with the Small Business Administration will also be encouraged to restore banking access to affected clients.
The practice of debanking has raised alarms in several political circles, with critics claiming that entire industries—such as firearms manufacturers, energy companies, and crypto firms—have been systematically excluded from financial services based on reputational concerns rather than legal grounds.
The issue became especially contentious during the Biden administration, when many in the crypto sector accused regulators of executing a stealth campaign, often referred to as “Operation ChokePoint 2.0,” designed to marginalize digital asset companies during the bear market of 2022.
Trump’s latest executive order reportedly instructs agencies to remove “reputational risk” from banking guidelines and training manuals, a move aimed at preventing institutions from justifying service denial based on subjective or politically motivated criteria. Critics argue that the reputational risk framework was misused to target crypto-related businesses.
Banking Industry Pushes Back Against Crypto Firms’ Licensing Efforts
As Trump moves to curtail debanking practices, major banking trade groups are attempting to block the entrance of crypto firms into the regulated banking space.
In a letter dated July 17, five prominent banking associations—including the American Bankers Association and the National Bankers Association—called on the Office of the Comptroller of the Currency (OCC) to reject banking license applications from digital asset companies like Ripple and Fidelity.
The associations argue that these firms’ proposed activities raise complex legal questions and fall outside the traditional scope of fiduciary duties performed by national trust banks. They also criticized the lack of transparency in the publicly available portions of the applications, claiming it hinders proper scrutiny.
Ripple, the company behind the XRP token, submitted its banking license application on July 2. This move followed a similar filing by Circle, the issuer of USDC, which is seeking to establish a national trust bank to oversee its stablecoin reserves.
These applications underscore the intensifying competition between traditional banks and emerging crypto-native firms. Stablecoin providers, in particular, are reshaping how digital payments operate, sometimes clashing with the payment infrastructure long dominated by legacy banks and card networks.
Adding to the evolving regulatory landscape, the U.S. recently passed the GENIUS Act—a bill that sets new rules for stablecoin issuers. Signed into law on July 18, it further legitimizes the growing role of crypto in the financial system.
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