Trump’s New Order Targets Crypto Debanking and Choke Point 2.0

President Donald Trump is preparing to sign a new executive order targeting regulations that influenced crypto debanking under Joe Biden’s administration. 

Reports indicate the order will seek to overturn policies tied to what industry leaders call “Operation Choke Point 2.0.” 

Trump to Put an End to Crypto Debanking

This initiative, a reference to an Obama-era crackdown on payday lenders and firearm dealers, allegedly aimed to prevent crypto businesses from securing banking services. 

The Trump administration intends to end these restrictions, which have made it difficult for crypto-focused banks to operate.

“The Trump Administration is apparently preparing to sign an executive order that could rescind certain Federal Reserve policies that have prevented crypto banks from accessing so-called master accounts. This would be a big deal for crypto-native banks like Custodia Bank and Caitlin Long, who are currently fighting the Federal Reserve in court over this very issue,” wrote Eleanor Terrett. 

The full details of the executive order are still being finalized. It is expected to address Federal Reserve policies on granting master accounts. 

Notably, these accounts allow banks to conduct transactions directly with the Fed. During Biden’s presidency, crypto-friendly banks such as Custodia faced repeated denials on holding these accounts. 

In short, the regulations indirectly prevented them from accessing key financial infrastructure. If these policies change, it could significantly reshape the US digital assets industry.

“This is notable because the Fed and FDIC have yet to rescind any anti-crypto guidance, despite comments last month from Federal Reserve Chairman Jerome Powell that he was struck by the growing number of apparent crypto debanking cases and that the Fed would take a fresh look at it,” wrote Eleanor Terrett. 

However, the Federal Reserve operates independently and is not required to follow directives from the White House or Congress. 

Any attempt to influence its policies could face pushback from central bank officials.

If signed, this will be Trump’s third crypto-related executive order since returning to office. His first order, issued on January 23, created a Presidential Working Group on Digital Asset Markets. 

Meanwhile, his second order established a US government Bitcoin reserve along with a separate digital asset stockpile.

Despite these moves, Trump’s recent White House Crypto Summit left industry leaders frustrated. Many felt the discussions lacked substance, and his plan for a Bitcoin reserve failed to lift market sentiment. 

Instead of buying new Bitcoin, the administration intends to use assets already seized from criminal cases.

Also, broader economic policies have added to market instability. Recent tariffs imposed on China, Mexico, Canada, and potentially the EU have rattled traditional markets. 

Institutional investors have reacted by pulling funds from Bitcoin and Ethereum ETFs over the past week.

As a result, Bitcoin dropped below $80,000 for the first time in four months. Ethereum also fell to $1,870, its lowest level since November 2023.