By Jason Meyers

President Trump is preparing a draft executive order aimed at eliminating potential barriers to the widespread adoption of digital assets. The proposed order would impose hefty fines on banks found discriminating against crypto firms and those with conservative ideals. This measure is viewed as a strategic effort to “open the spigots” across the U.S. banking system, facilitating the free flow of value between on-chain and off-chain ecosystems, particularly for the issuance, redemption, and transfer of stablecoins.

The GENIUS Act, designed to foster innovation in blockchain technology and digital currencies while enhancing national economic competitiveness, has raised concerns about potential roadblocks in the financial sector. Critics have argued that banks’ reluctance to serve crypto-related businesses—often due to “reputational risks” or regulatory pressures—could impede the Act’s objectives. The draft executive order directly targets these issues by directing federal regulators to investigate banks for violations of laws such as the Equal Credit Opportunity Act, antitrust statutes, and consumer protection rules.

According to a draft of the order reviewed by The Wall Street Journal, financial institutions engaging in “de-banking”—the practice of terminating or restricting services based on political bias or ideological grounds—could face monetary penalties, consent decrees, or other disciplinary actions. The draft empowers agencies like the Federal Deposit Insurance Corporation (FDIC), the Office of the Comptroller of the Currency (OCC), the Department of Justice (DOJ), and the Small Business Administration (SBA) to probe allegations of discrimination. The SBA, in particular, would review how banks handle loan guarantees, which are vital for crypto startups and conservative nonprofits seeking access to capital.

The draft follows prior administration efforts, such as the January order that removed regulatory hurdles for blockchain businesses and addressed “Operation Chokepoint 2.0,” where regulators purportedly pressured banks to cut ties with crypto firms. 

Potential Effects on the Crypto Ecosystem

If signed, the executive order’s implications could extend far beyond penalties, potentially reshaping the landscape for digital assets in the United States. By mandating fair access to banking services, it could unlock significant opportunities for crypto firms that have historically faced account closures and limited integration with traditional financial systems. Industry leaders and analysts are describing the draft as a potential “turning point” that might compel major banks to embrace cryptocurrency businesses, curbing debanking practices and encouraging greater institutional participation.

A key area of impact would be the stablecoin sector. Stablecoins, which act as a bridge between fiat currencies and blockchain networks, depend on efficient banking on-ramps and off-ramps for issuance and redemption. This aligns with the GENIUS Act’s focus on U.S. leadership in digital innovation, as unrestricted banking access for crypto firms could drive a surge in liquidity and institutional investment and also create a spike in demand for US Treasuries which would drive interest rates lower. 

Eric Trump has discussed his experiences with account closures highlighting the political underpinnings of such practices and emphasized the need for merit-based opportunities. Binance Founder Changpeng Zhao, “CZ” has similarly praised the draft as a directive that could prevent unjustified service restrictions by banks.

On a broader scale, the order could boost investor confidence, potentially benefiting all crypto assets through increased institutional involvement which might gain smoother access to banking infrastructure, enhancing overall market liquidity as barriers diminish. However, banks have justified past actions as compliance-related, pointing to risks like money laundering and regulatory oversight. Are there other motives?

Reactions and Future Outlook

The crypto community has reacted positively to the draft, seeing it as part of President Trump’s pro-crypto stance, which includes ideas like incorporating Bitcoin into 401(k) plans and establishing a strategic Bitcoin reserve. Senate Banking Committee Chairman Tim Scott has accused regulators of targeting individuals they “just don’t like,” fueling demands for accountability.

SEC’s Project Crypto is an effort that modernizes regulations and paves the way for full on chain migration enabling instant settlement of digital securities against stablecoins, boosting efficiency and liquidity. The Trump order, if signed, would further optimize bottlenecks across the entire US financial system. 

When you examine the migration effect on banks, this adds substantial velocity to the staggering $327 trillion total value encompassing $62 trillion in equities, $55 trillion in debt securities, and $210 trillion in notional derivatives. On-chain migration would also save banks over $500 billion in annual operational costs, raising additional questions about the true motive behind Operation Chokepoint 2.0. 

Should President Trump sign the order, regulators would likely initiate investigations swiftly, with the DOJ’s task force on illegal debanking playing a central role. While the full effects remain speculative until signing, the proposal marks a significant step toward tokenizing the financial system and fulfilling his promise to make America the crypto capital of the world.