Binance founder and former CEO hailed the new White House executive order, calling it a global breakthrough for crypto in the US.
Following the new directive, banks may face fines for crypto bias, a move that could inspire institutional adoption.
New White House Order Could Force Banks to Embrace Crypto
The White House is working on an executive order to target banks that discriminate against crypto firms and related conservatives. This move is part of the Trump administration’s move to address debanking practices. This time, Trump leverages financial repercussions for perpetrators.
Some see this as the biggest breakthrough since the approval of Bitcoin ETFs (exchange-traded funds), setting the stage for institutional inflows.
“This would force every major bank to embrace crypto companies. Get ready for the floodgates to open – institutional money is coming,” wrote investor Paul Barron.
Meanwhile, Binance’s Changpeng Zhao (CZ) lauds it as a way to ensure that banks can no longer ignore crypto.
If the White House advances with the executive orders, lenders that drop customers for political reasons would be punished.
The executive order compels bank regulators to investigate financial institutions. More closely, it directs regulators to determine whether these institutions violated the Equal Credit Opportunity Act, antitrust laws, or consumer financial protection laws.
Punishment for violations ranges from monetary penalties and consent decrees to disciplinary measures of diverse extents.
According to the Wall Street Journal, the order is still in draft form. It could be signed this week, but the administration reserves the right to delay or change its plans.
Further, the draft does not single out any bank. Still, it references an instance where Bank of America (BofA) was accused of shutting down the accounts of a Christian organization operating in Uganda based on the organization’s religious beliefs.
At the time, BofA ascribed the move to a decision not to support small businesses serving outside the US. While BofA was well within its rights, the Christian organization passes as a conservative under Trump’s prospective executive order.
Banks Face Rising Pressure Amid Crackdown on Chokepoint Tactics
If the order passes, regulators would be compelled to eliminate policies that may have culminated in customer dismissals. Further, the Small Business Administration will have to review the practices of banks guaranteeing agency loans.
Regulators must also refer potential violations to the attorney general where necessary.
This development is timely, only days after US banking giants were accused of disrupting the growth of crypto platforms like Coinbase and Robinhood.
More closely, banking giants like JPMorgan are accused of deliberately inflating fees, limiting access, and effectively undermining the crypto industry.
“If it suddenly costs $10 to move $100 into a Coinbase or Robinhood account, maybe fewer people will do it. Or if it costs $10 to get a cheaper loan from a fintech, maybe you’ll be forced to take a crappier one from JPM,” Alex Rampell, General Partner at Andreessen Horowitz (a16z), expressed his concerns in a newsletter on July 31.
As BeInCrypto reported, the tactics mirror a new form of Operation Chokepoint aimed at suppressing fintech and crypto competition.
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