U.S. banks' ability to impede cryptocurrency transactions is being challenged by Binance founder, Changpeng Zhao.
The White House is preparing an executive order aimed at preventing banks from discriminating against cryptocurrency firms. This strategic move, titled "Guaranteeing Fair Banking for All Americans," seeks to ensure fair access to banking for all lawful businesses, including crypto companies [1][3].
If signed, the order will instruct federal agencies to investigate and remedy financial institutions' denial or termination of banking services based on customers' political beliefs, religious beliefs, or lawful business activities, such as cryptocurrency firms [3]. Agencies will be required to review rules and regulations, particularly those linked to reputational risk, that have led banks and credit unions to "debank" certain customers. Disciplinary actions will be taken if violations of laws such as the Equal Credit Opportunity Act or antitrust statutes are found [2][3].
The order also aims to modernise banking regulation for digital assets. Recommendations include clarifying permissible bank activities like custody and stablecoin issuance, aligning bank capital rules with actual digital asset risks, and promoting transparency in bank charter processes. This framework supports more predictable, inclusive regulatory treatment of crypto businesses by depository institutions [1][4].
This development could pave the way for broader institutional participation in the crypto space, according to industry leaders like Changpeng Zhao, founder of Binance [5]. Zhao believes the order could open banking for crypto internationally [6]. Notably, the order could also mean stricter fines for banks with a bias against crypto, as breaches of the Equal Credit Opportunity Act, antitrust laws, or consumer protection statutes could lead to monetary fines, consent decrees, and a range of disciplinary actions [7].
The American banking industry is opening up to supporting more crypto firms [8]. However, accusations of major US banks hindering the growth of crypto platforms such as Coinbase and Robinhood have been made [9]. Gemini, a crypto exchange, has accused JPMorgan of preventing them from the re-onboarding process [10]. In a positive development, US-based crypto exchange Coinbase has partnered with JPMorgan Chase for integrated credit card services, account linking, and a transferable rewards program [11].
It's important to note that the White House executive order remains in draft form and may still be revised or postponed [12]. The development comes shortly after Binance Founder Changpeng Zhao teased an altcoin season as BNB price hit an all-time high [13]. The report is from The Wall Street Journal [14].
In conclusion, the White House's executive order, if signed, could significantly impact the crypto industry by preventing discriminatory banking practices against crypto firms, promoting innovation, and enhancing U.S. leadership in digital finance—potentially easing the access of crypto companies to banking services and reducing the risk of debanking based on political or industry factors [1][3][4].
The executive order, if signed, will not only prevent banks from discriminating against cryptocurrency firms, but also modernize banking regulation for digital assets, promoting innovation and ensuring fair access to banking for all lawful businesses in the tech-driven business sector. If violations of laws such as the Equal Credit Opportunity Act or antitrust statutes are found, stricter fines may be imposed on banks with a bias against crypto.
