President Trump moves to block discriminatory banking practices targeting the digital asset industry.
On August 7, U.S. President Donald Trump signed an executive order aimed at preventing federal regulators from targeting financial institutions that serve the cryptocurrency industry.
According to the official White House document, “the digital asset industry has also been subject to unfair debanking efforts.” These practices, the administration emphasized, “erode public trust in banking institutions and regulators, harm livelihoods, and impose significant financial burdens on law-abiding Americans.”
The presidential order removes the concept of “reputational risk” as a valid justification for increased regulatory scrutiny. The Federal Reserve had previously defined reputational risk as “the potential that negative publicity regarding an institution’s business practices, whether true or not, will cause a decline in the customer base, costly litigation, or revenue reductions.”
Although the term wasn’t explicitly applied to cryptocurrencies, critics argue that regulators have used this authority to selectively target the digital asset industry, fostering an environment of systematic debanking.
Trump had previously vowed to end what’s been called “Operation Choke Point 2.0,” a term coined in 2023 by Nic Carter, co-founder of Castle Island Ventures. It describes actions taken by federal regulators to restrict how financial institutions interact with the crypto industry.
Political reaction to the executive order
Republican lawmakers welcomed Trump’s move. House Financial Services Committee Chairman French Hill called the order “an important step,” stating:
“Targeting Americans for their political beliefs undermines the freedoms on which our country was founded and has no place in our financial system.”
Senator Cynthia Lummis echoed that support, writing on X:
