Donald Trump is about to sign an executive order reversing Biden's crypto banking restrictions

The Trump administration is preparing to take important steps to support the crypto industry by addressing the banking restrictions implemented under the Biden administration. According to White House sources, President Donald Trump is set to sign an executive order aimed at reversing regulations related to "Operation Chokepoint 2.0," a term coined to describe efforts to make it difficult for crypto companies to access banking services. Target Chokepoint 2.0 Campaign Bo Hines, executive director of the White House's Presidential Working Group on Digital Assets, confirmed that administrative action is imminent, though specific details have not yet been disclosed. Hines emphasized that the administration is committed to repealing policies that restrict the financial activities of crypto companies, compared to the Obama-era "Operation Choke Point," which targeted installment lenders and arms dealers. Potential policy changes of the Federal Reserve One of the key aspects of the executive order may have to do with the Federal Reserve's policies on key accounts, which are essential for direct payments and access to the Fed's financial services. such as Custodia, which was previously denied a prime account under the Biden administration, significantly limiting their growth potential. Eleanor Terrett, a reporter for Fox Business, noted the significance of the move, emphasizing that despite recent comments by Federal Reserve Chairman Jerome Powell about concerns about the cancellation of cryptocurrencies, the Fed and the FDIC have yet to cancel their anti-crypto policies. This executive order could be a major step towards ensuring crypto companies have equal access to banking services. Challenges and Strategic Considerations Although the Federal Reserve is independent, the Trump administration still seems determined to advance its crypto-friendly policy agenda. Senior White House officials are expected to meet on Thursday to assess potential legal hurdles before finalizing the executive order, sources said. However, a White House representative denied any such meetings but reiterated that efforts to dismantle Operation Chokepoint 2.0 were underway. Potential Indicators of Stablecoins In addition to addressing banking restrictions, the upcoming executive order may also issue a directive clarifying that stablecoins should not be classified as securities. Stablecoins, which are pegged to the US dollar, are the focus of regulatory oversight, and such a directive could significantly impact how they are handled under US financial laws. If signed, this would be Trump's third crypto-related executive action since returning to office. His first order, signed on Jan. 23, establishes the President's Working Group on Digital Asset Markets. The second order, signed last week, requires the creation of a U.S. government Bitcoin reserve fund along with a separate reserve for other digital assets. Market reaction and broader economic impact Despite these crypto-friendly developments, the market has reacted to significant volatility. Trump's recent crypto summit left industry leaders unimpressed, especially due to plans to use the confiscated assets for the administration's Bitcoin reserve fund instead of buying them directly on the market. Broader economic policies, including new tariffs on China and other countries, have also created instability in financial markets. Institutional investors have reacted by withdrawing money from Bitcoin and Ethereum ETFs, resulting in a price drop. Bitcoin fell below $80,000 for the first time in four months, while Ethereum dropped to $1,870. These market changes suggest that while regulatory clarity and banking access are positive developments for the crypto industry, macroeconomic factors and investor sentiment continue to play an important role in determining asset prices. Conclude The upcoming executive order represents a critical moment for the crypto industry, potentially opening up access to banking, providing regulatory clarity for stablecoins, and signaling a pro-crypto stance from the Trump administration. However, legal challenges and broader economic conditions could affect the effectiveness of these policies. As the administration moves forward, industry stakeholders will be closely watching for more insights and implementation strategies that could shape the future of digital assets in the United States.