$TRUMP Signs Executive Order to Protect #Crypto Firms From "Unfair Debanking"

In a decisive move that could reshape the future of the U.S. digital asset ecosystem, former President Donald Trump has signed an executive order aimed at preventing federal banking regulators from targeting financial institutions that work with the cryptocurrency industry. The order marks a pivotal shift in U.S. crypto policy, especially after years of tension between regulators and the digital asset sector.

End of “Reputational Risk” as a #Regulatory Weapon

The executive order, signed Thursday, eliminates the ability of federal banking agencies to use "reputational risk" as a justification to limit or scrutinize relationships between banks and crypto-related businesses. This term, previously employed by regulatory agencies such as the Federal Reserve, Office of the Comptroller of the Currency (#OCC ), and Federal Deposit Insurance Corporation (#FDIC ), refers to the risk that a business might harm a bank’s public image.

The Federal Reserve had defined reputational risk as the "potential that negative publicity regarding an institution’s business practices, whether true or not, will cause a decline in the customer base, costly litigation, or revenue reductions."

While the term is not crypto-specific, critics argue that regulators have long weaponized it to target the blockchain and crypto sectors without direct evidence of wrongdoing.

In a fact sheet released by the White House, officials stated:

“The digital assets industry has also been the target of unfair debanking initiatives. These practices erode public trust in banking institutions and regulators, harm livelihoods, freeze payrolls, and impose significant financial burdens on law-abiding Americans.”