On August 7th, 2025, President Trump signed an executive order aimed at "stopping banking discrimination against cryptocurrency businesses." It's a big deal for crypto startups, but it raises questions about compliance and risks of selective adherence by banks. Let's dive into the implications and how they're going to affect crypto businesses.
The Executive Order: What It Entails
The Executive Order calls for a review of banking practices that may have discriminated against lawful businesses. Specifically, it says banks can't deny services based on political beliefs or reputational risks. This is a significant shift, and it could change the game for crypto firms struggling to find a traditional bank willing to work with them.
The Risks of Selective Compliance
While the order is a positive step, it could lead banks to selectively comply. This could create financial stability risks and regulatory gaps. The Financial Stability Oversight Council (FSOC) even noted that crypto activities might pose risks to U.S. financial stability. If banks cherry-pick which regulations to follow, it could open up enforcement gaps and increase systemic risk.
What's Next for Crypto Startups in the U.S.?
This could potentially improve access for crypto startups in the U.S. It might lead to more institutional investment and innovation in the digital asset space. Together with efforts in Congress to protect certain industries, it seems banks will have to reassess their policies, making life a lot easier for crypto firms.
The Ripple Effect in Europe and Asia
And it's not just the U.S. — this may also reshape banking relationships for crypto companies in Europe and Asia. Traditional banks might take cues and provide better access to crypto firms if this is successful in the U.S. It's all interconnected, after all.
Precautions Against Debanking
But will debanking practices just resurface under different names? Crypto businesses should still be cautious. Here are some measures to take:
- Ensure full compliance with laws to avoid legitimate reasons for service denial.
- Build transparent relationships with banks and regulators to mitigate reputational risks.
- Use the executive order to challenge unjustified service denials.
- Diversify banking relationships to lessen dependency on any single institution.
- Keep a close watch on regulatory developments stemming from the order.
- Participate in industry groups to influence policy and share best practices.
Summary
Trump's executive order could be a turning point for crypto banking, but with a few caveats. It’s a chance for growth, but firms will need to be vigilant to navigate the new landscape. The future of crypto banking is uncertain but also full of potential.
